George Butler owned a tugboat and was tired of his current job. He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown. Prepare journal entries to record the following transactions.May 1 Butler invested $20,000 cash and his tugboat valued at $90,000 in the business in exchange for common stock.May 2 Butler paid $3,000 cash for office equipment to help him keep track of business activities.May 3 Butler bought boating supplies costing $2,500 on credit.May 4 Butler paid the river master $500 cash for the first month's dock rental.May 5 Butler paid $1,800 cash for a six-month insurance policy.May 10 Butler received $2,000 cash from clients for his first tour.May 12 Butler provided a $3,500 tour on credit, the customer

has agreed to pay within10 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 25 Butler received $2,750 cash for additional tours that he completed that day.May 31 Butler paid his crew member a salary of $1,000.May 31 The company paid Butler, its sole stockholder, $2,000 for personal use.

What will be an ideal response?


May 1

Cash 20,000
Tugboat90,000
?G. Butler, Capital110,000
 Owner invested in business.

2 Office Equipment 3,000
?Cash3,000
 Purchased office equipment.

3 Boating Supplies2,500
?Accounts Payable2,500
 Purchased supplies on account.

4 Rent Expense500
?Cash500
 Paid for dock rent.

5 Prepaid Insurance1,800
?Cash1,800
 Paid for six month insurance policy.

10 Cash 2,000
?Tugboat Tour Revenue2,000
 Recorded tour revenue.

12 Accounts Receivable3,500
?Tugboat Tour Revenue 3,500
 Recorded tour revenue provided on account.

19 Accounts Payable2,500
?Cash2,500
 Paid on account.

22 Cash3,500
?Accounts Receivable3,500
 Record collection on account.

25 Cash2,750
?Tugboat Tour Revenue2,750
 Recorded tour revenue.

31 Salary Expense1,000
?Cash1,000
 Paid assistant's salary.

31 Dividends 2,000
?Cash2,000
 Record dividends paid.

Business

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