Journal Entries – Exercises

Rabbit Miniature Golf Inc was opened on February 1 by Michael Rabbit. The following selected events and transaction occurred during February.

Feb.     1          Invested $60,000 cash in the business in exchange for ordinary shares.

2          Purchased Nadine Karo land for $40,000. The price consists of land $15,000; building $20,000 and Equipment $5,000. (Make one compound entry).

4          Paying advertising expenses of $10,000.

7          Paid Cash $1,500 for a one year insurance police.

10        Purchased Golf equipment for $3,000 from Ketut Sport, Payable in 30 days.

18        received golf fees of $2,800 in cash.

23        Declared and paid a $1,000 cash dividend.

25        paid wages of $700

28        Paid Ketut Sport in full.

28        Received $1,000 of fees in cash.

Intructions

Journalize the February Transactions. (Provide explanations for the journal entries)

Answer :

Date	Description	Debet	Credit
Feb       1	Cash	$60,000
	Share Capital - Ordinary		60,000
2	Land	15,000
	Building	20,000
	Equipment	5,000
	Cash		40,000
4	Advertising Expense	10,000
	Cash		10,000
7	Prepaid Insurance	1,500
	Cash		1,5000
10	Equipment	3,000
	Account Payable		3,000
18	Cash	2,800
	Service Revenue		2,800
23	Dividends	1,000
	Cash		1,000
25	Wages Expanse	700
	Cash		700
28	Account payable	3,000
	Cash		3,000
28	Cash	1,000
	Service Revenue		1,000