QS 2-9 (Algo) Preparing journal entries LO A1

Prepare general journal entries for the above transactions.

Journal entry worksheet

Journal entry worksheet

Date Gneral Journal Debit Credit

Note: Enter debits before credits.

1 The company provided $3,800 of sustainability consulting services on credit to a customer.

2 The company purchased $1,200 of energy-efficient supplies on credit.
3 The company collected $2,300 cash as partial payment of the May 1 consulting revenue.
4 The company paid $1,200 cash toward the payable for energy-efficient supplies.
5 The company paid $1,000 cash for May’s renewable energy utilities.
Processing Transactions
Double-entry accounting is useful in analyzing and processing transactions. Analysis of each transaction follows these four steps.

Step 1 Identify transactions and source documents.

Step 2 Analyze the transaction using the accounting equation.
Step 3 Record the journal entry.
Step 4 Post the entry (for simplicity, we use T-accounts as ledger accounts).

Processing Transactions 1

1. Provide Consulting Services on Credit

1 Identify: The company provided $3,800 of sustainability consulting services on credit to a customer.
4. Post
2. Analyze Assets = Liabilities + Equity Accounts Recivable 106
Acc. Receiv. Cons. Rev. (1) 3,800
+3,800 = + +3,800

3. Record Date Acccount Titles and Explanation PR Debit Credit Consulting Revenue 403
(1) Accounts Recivable 106 3,800 (1) 3,800
Consulting Reve. 403 3,800

2. Purchase Supplies on Credit

1 Identify: The company purchased $1,200 of energy-efficient supplies on credit.
4. Post
2. Analyze Assets = Liabilities + Equity Supplies 126
Supplies Acc.Payable (2) 1,200
+1,200 = +1,200 + 0

3. Record Date Acccount Titles and Explanation PR Debit Credit Acounts Payable 201
(2) Supplies 126 1,200 (2) 1,200
Accounts Payable 201 1,200

3. Receipt Cash for Accounts Receivable

1 Identify: The company collected $2,300 cash as partial payment of the May 1 consulting revenue.
4. Post
2. Analyze Assets = Liabilities + Equity Cash 101
Cash Acc. Receivable (3) 2,300
+2,300 +2,300 = 0 + 0

3. Record Date Acccount Titles and Explanation PR Debit Credit Accounts Receivable 106
(3) Cash 101 2,300 (1) 3,800 (3) 2,300
Accounts Receivable 106 2,300

4. Payment on Supplies
1 Identify: The company paid $1,200 cash toward the payable for energy-efficient supplies.
4. Post
2. Analyze Assets = Liabilities + Equity Acounts Payable 201
Cash Accounts Payable (4) 1,200
-1,200 = -1,200 + 0

3. Record Date Acccount Titles and Explanation PR Debit Credit Cash 101
(4) Accounts Payable 201 1,200 (3) 2,300 (4) 1,200
Cash 101 1,200

5. Payment for Utilities

1 Identify: The company paid $1,000 cash for May’s renewable energy utilities.
4. Post
2. Analyze Assets = Liabilities + Equity Utilities Expense 690
Cash lities Expense (5) 1,000
-1,000 = 0 + -1,000

3. Record Date Acccount Titles and Explanation PR Debit Credit Cash 101
(5) Utilities Expense 690 1,000 (3) 2,300 (4) 1,200
Cash 101 1,000 (5) 1,000

Following are the transactions of Green Energy Company.

1-May The company provided $3,800 of sustainability consulting services on credit to a customer.
3-May The company purchased $1,200 of energy-efficient supplies on credit.
9-May The company collected $2,300 cash as partial payment of the May 1 consulting revenue.
20-May The company paid $1,200 cash toward the payable for energy-efficient supplies.
31-May The company paid $1,000 cash for May’s renewable energy utilities.
 General Ledger
Assets = Liabilities + Equity

Cash 101 Acounts Payable 201 De Sahwn Tyler Capital 301

(3) 2,300 (4) 1,200 (4) 1,200 (2) 1,200
(5) 1,000 Balance 0

Unearned Land. Reve. 236 C. Taylor, Withdrawals 302

Consulting Revenue 403

(1) 3,800
Balance 100
Balance 3,800

Accounts Receivable 106 Rental Revenue 406

(1) 3,800 (3) 2,300

Balance 1,500
Utilties Expese 690
(5) 1,000
Supplies 124
(2) 1,200 Balance 1,000

Rent Expense 640

Balance 1,200

Utilities Expense 690

Prepaid Insurance 128

Accounts in this white area on the income

statement
Equipment 167

$ 2,800 = $ - + $ 2,800

$ 2,800