Question

T. James, owner, invested $20,000 cash in Sustain Company in exchange for common stock. 2 The company purchased $13,000 of furniture made from reclaimed wood on credit. 3 The company paid $2,400 cash for a 12-month insurance policy on the reclaimed furniture. 4 The company billed a customer $12,000 in fees earned from preparing a sustainability report. 12 The company paid $13,000 cash toward the payable from the June 2 furniture purchase. 20 The company collected $12,000 cash for fees billed on June 4. 21 T.James invested an additional $19,000 cash in Sustain Company in exchange for common stock. 30 The company received $14,000 cash from a client for sustainability services for the next 3 months. Prepare general journal entries for the above transactions.

Answer 1

Answer:

Sustain Company

General Journal

1

Cash $20,000 (debit)

Common Stock $20,000 (credit)

Owner investment in the company

2

Office furniture $13,000 (debit)

Accounts Payable $13,000 (credit)

Wood furniture purchased on credit

3

Prepaid Insurance$2,400 (debit)

Cash $2,400 (credit)

Insurance paid in advance

4.

Accounts Receivable $12,000 (debit)

Service Revenue $12,000 (credit)

Services rendered on credit

12

Accounts Payable $13,000 (debit)

Cash $13,000 (credit)

Payment to suppliers

20

Cash $12,000 (debit)

Accounts Receivables $12,000 (credit)

Cash receipts from customers

21

Cash $12,000 (debit)

Common Stock $12,000 (credit)

Owners invest cash in exchange of common stock

30

Cash $14,000 (debit)

Deferred Revenue $14,000 (credit)

Cash received for services to be rendered

Explanation:

See journals and their narrations prepared above.