21E - Horngren'S Financial And Managerial Accounting

Question

Question: E2-21 Journalizing transactions from T-accounts In December 2018, the first five transactions of Abling’s Lawn Care Company have been posted to the T-accounts. Prepare the journal entries that served as the sources for the five transactions. Include an explanation for each entry

Cash 

1. 57,000 40,000 (3) 3,800 (5) (2) 800 (3) 40,000 Office Supplies Common Stock Building Equipment Accounts Payable 800 (2) 46,000 (4) (5) 3,800 Notes Payable 57,000 (1) (4) 46,000 40,000 (3) 3,800 (5) (2) 800 (3) 40,000 Office Supplies Common Stock Building Equipment Accounts Payable 800 (2) 46,000 (4) (5) 3,800 Notes Payable 57,000 (1)

Step-by-Step Solution

Answer

T-Account is a ledger account in the form t-shape and journal entries are recorded. Journal entry shown in step 2.

Step-by-Step Solution Step 1: Definition of T-Account

T-Account is defined as the summarised format of the ledger accounts which is prepared in the form of a T-shape.

Step 2: Recording Journal Entries

	Journal entry
Date	Particulars	Amount ($)	Amount ($)
1)	Cash	$57,000
	Common Stock		$57,000
	(Common stock issued for cash)
2)	Office Supplies	$800
	Accounts Payable		$800
	(Office supplies purchased on credit)
3)	Building	$40,000
	Cash		$40,000
	(Building purchased for cash)
4)	Cash	$46,000
	Notes Payable		$46,000
	(Cash raised using notes payable)
5)	Equipment	$3,800
	Cash		$3,800
	(Equipment purchased using cash)