Record each of the following transactions or recognitions in T-account format, label the accounts used, and indicate for each account whether it is an asset (A), liability (L), revenue (R), expense (E), or owners’ equity (OE) account. Make only those entries required to record an event or transaction; do not include
Record each of the following transactions or recognitions in T-account format, label the accounts used, and indicate for each account whether it is an asset (A), liability (L), revenue (R), expense (E), or owners’ equity (OE) account. Make only those entries required to record an event or transaction; do not include balances that may exist in the account as a result of earlier entries. Make sure that the sum of your debit entries equals the sum of your credit entries.
a. Company Q sells $4,000 of merchandise to a customer; this merchandise is valued in inventory at $3,200.
b. Company Q purchases, on credit, merchandise normally valued at $8,000; because of the size of the order, Q’s vendor provides a 5 percent quantity discount.
c. Company Q pays $600 of accrued interest payable on its bank loan.
d. Company Q receives $300 due in rent for this month from a tenant who rents an office suite in Q’s headquarters building.
e. Company Q borrows an additional $10,000 from the bank.
f. Company Q pays $1,000 in dividends to its president, the sole owner of the corporation.
g. Company Q scraps merchandise valued at $500 because it is obsolete.
h. At year-end company Q makes profit-sharing payments to its employees totaling $1,700; these profit-sharing obligations were previously accrued to the extent of $1,500.
i. Company Q receives $2,000 from Ms. D in partial payment of the $5,000 that she owes for services rendered in previous accounting periods.
j. Company Q pays $1,500 to company L in partial payment of the $3,500 it owes for services ir received from L in previous accounting periods.
k. Company Q pays $5,300 to Centerville Bank: $5,000 repayment of principal on a loan, and $300 interest for the current month.
l. Company Q pays $3,600 in rent on office space: $1,800 for this month, and the same amount for next month.
Use T-account format, like in the question above states.
Trending now
This is a popular solution!
Step by step
Solved in 7 steps
