The following transactions occur for Cardinal Music Academy during the month of October:

a. Provide music lessons to students for $7,000 cash.

b. Purchase prepaid insurance to protect musical equipment over the next year for $3,000 cash.

c. Purchase musical equipment for $10,000 cash.

d. Obtain a loan from a bank by signing a note for $10,000.

Record the transactions. The company uses the following accounts: Cash, Prepaid Insurance, Equipment, Notes Payable, and Service Revenue. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Question

Business

Kole Kirby

24 April, 08:44

The following transactions occur for Cardinal Music Academy during the month of October:

a. Provide music lessons to students for $7,000 cash.

b. Purchase prepaid insurance to protect musical equipment over the next year for $3,000 cash.

c. Purchase musical equipment for $10,000 cash.

d. Obtain a loan from a bank by signing a note for $10,000.

Record the transactions. The company uses the following accounts: Cash, Prepaid Insurance, Equipment, Notes Payable, and Service Revenue. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

+5

Answers (1)

Know the Answer?

Mara Eaton · Answer 1

The entries to record the transactions are given below.

a. Provide music lessons to students for $7,000 cash.

Debit Cash Asset $ 7000

CreditService Revenue income $ 7000

b. Purchase prepaid insurance to protect musical equipment over the next year for $3,000 cash.

Debit Prepaid Insurance equipment Asset $ 3000

Credit Cash Asset $ 3000

c. Purchase musical equipment for $10,000 cash.

Debit Equipment Asset $ 10,000

Credit Cash Asset $ 10,000

d. Obtain a loan from a bank by signing a note for $10,000

Debit Cash Asset $ 10,000

Credit Notes payable $ 10,000