Question

rosenthal decorating inc. is a commercial painting and decorating contractor that began operations in january. the following transactions occurred during the year: a. on january 15, rosenthal sold 500 shares of its common stock to william hensley for $14,000. b. on january 24, rosenthal purchased $720 of painting supplies from westwood builders supply company on account. c. on february 20, rosenthal paid $720 cash to westwood builders supply company for the painting supplies purchased on january 24. d. on april 25, rosenthal billed bultman condominiums $40,700 for painting and decorating services performed in april. e. on may 12, rosenthal received $12,500 from bultman condominiums for the painting and decorating work billed in april. f. on june 5, rosenthal sent arlington builders a $9,500 bill for a painting job completed on that day. g. on june 24, rosenthal paid wages for work performed during the preceding week in the amount of $9,400. required: 1. prepare a journal entry for each of the transactions listed above. if an amount box does not require an entry, leave it blank. january 15 january 24 february 20 april 25 may 12

Explanation:

Step1: Record stock - sale

When selling common stock, cash increases (debit) and common - stock account increases (credit).
Debit: Cash $14,000$
Credit: Common Stock $14,000$

Step2: Record purchase of supplies on account

Supplies increase (debit) and accounts payable increase (credit).
Debit: Supplies $720$
Credit: Accounts Payable $720$

Step3: Record payment for supplies

Cash decreases (credit) and accounts payable decreases (debit).
Debit: Accounts Payable $720$
Credit: Cash $720$

Step4: Record service billing

Accounts receivable increase (debit) and service revenue increases (credit).
Debit: Accounts Receivable $40,700$
Credit: Service Revenue $40,700$

Step5: Record cash receipt from customer

Cash increases (debit) and accounts receivable decreases (credit).
Debit: Cash $12,500$
Credit: Accounts Receivable $12,500$

Step6: Record job billing

Accounts receivable increase (debit) and service revenue increases (credit).
Debit: Accounts Receivable $9,500$
Credit: Service Revenue $9,500$

Step7: Record wage payment

Wages expense increases (debit) and cash decreases (credit).
Debit: Wages Expense $9,400$
Credit: Cash $9,400$

Answer:

Date	Account Titles and Explanation	Debit	Credit
	Common Stock		$14,000$
January 24	Supplies	$720$
	Accounts Payable		$720$
February 20	Accounts Payable	$720$
	Cash		$720$
April 25	Accounts Receivable	$40,700$
	Service Revenue		$40,700$
May 12	Cash	$12,500$
	Accounts Receivable		$12,500$
June 5	Accounts Receivable	$9,500$
	Service Revenue		$9,500$
June 24	Wages Expense	$9,400$
	Cash		$9,400$