George Butler, the sole stockholder, opened a business that provides day tugboat tours to tourists along the Mississippi River. Prepare journal entries to record the following transactions. May 1Butler invested $20,000 cash and a tugboat valued at $90,000 in exchange for common stock. May 2Butler paid $3,000 cash for office equipment.May 3Butler bought boating supplies costing $2,500 on credit.May 4Butler paid $500 cash for the first month's dock rental.May 5Butler paid $1,800 cash for a six-month insurance policy. May 10 Butler gave a client a tour and immediately received $2,000 cash.May 12 Butler provided a $3,500 tour on credit, the customer agreed to pay within 10 daysMay 19 Butler paid for the boating supplies originally purchased on May 3. May 22 Butler receives payment
on the account from the client entry on May 12.May 25Butler received $2,750 cash for tours that he completed that day. May 31Butler paid his crew member a salary of $1,000.May 31The company paid $2,000 in cash dividends.
What will be an ideal response?
May 1
Cash……………………………………. 20,000
Tugboat………………………….……… 90,000
Common Stock…………………. 110,000
Stockholder invested in business.
| 2 | Office Equipment……………………3,000 |
Purchased office equipment.
| 3 | Boating Supplies………………………2,500 |
Purchased supplies on account.
| 4 | Rent Expense……………………………..500 |
Paid for dock rent.
| 5 | Prepaid Insurance…………………….1,800 |
Paid for six month insurance policy.
| 10 | Cash……………………………………...2,000 |
Recorded tour revenue.
| 12 | Accounts Receivable…………………….3,500 |
Recorded tour revenue provided on account.
| 19 | Accounts Payable………………………..2,500 |
Paid on account.
| 22 | Cash……………………………………...3,500 |
Record collection on account.
| 25 | Cash……………………………………...2,750 |
Recorded tour revenue.
| 31 | Salary Expense…………………………..1,000 |
Paid assistant's salary.
| 31 | Dividends ………………... | 2,000 |
Record cash dividends.
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