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22 March, 19:34

Culver Corporation has the following transactions during August of the current year.

Aug. 1 Issues shares of common stock to investors in exchange for $10,750.

4 Pays insurance in advance for 3 months, $1,150.

16 Receives $710 from clients for services rendered.

27 Pays the secretary $590 salary.

Required:

Journalize the transactions.

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Answers (1)
  1. 22 March, 21:58
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    Journal Entries

    Aug. 1

    Cash $10,750 (debit)

    Common Stock $10,750 (credit)

    Aug 4

    Insurance Prepaid $1,150 (debit)

    Cash $1,150 (credit)

    Aug 16

    Cash $710 (debit)

    Sales Revenue $710 (credit)

    Aug 27

    Salaries Expense $590 (debit)

    Cash $590 (credit)

    Explanation:

    Note that insurance paid in advance is an asset. The asset account title of Insurance Prepaid must be used.
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