Apr. 1 Shareholders invested €50,000 cash in the business in exchange for ordinary shares — Prairie Park ASA was started April Wright and associates following selected events
Prairie Park ASA was started on April 1 by F. L. Wright and associates. The following selected events and transactions occurred during April.
Apr. 1 Shareholders invested €50,000 cash in the business in exchange for ordinary shares.
4 Purchased land costing €34,000 for cash.
8 Incurred advertising expense of €1,800 on account.
11 Paid salaries to employees €1,500.
12 Hired park manager at a salary of €4,000 per month, effective May 1.
13 Paid €1,500 cash for a one-year insurance policy.
17 Declared and paid a €1,400 cash dividend.
20 Received €6,400 in cash for admission fees.
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25 Sold 100 coupon books for €30 each. Each book contains 10 coupons that entitle the holder to one admission to the park.
30 Received €8,500 in cash admission fees.
30 Paid €900 on balance owed for advertising incurred on April 8.
Prairie Park uses the following accounts: Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Service Revenue, Share Capital—Ordinary, Dividends, Service Revenue, Advertising Expense, and Salaries and Wages Expense.
Instructions
Journalize the April transactions.
SOLUTION
J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 1
Cash
50,000
Share Capital—Ordinary
50,000
(Issued shares for cash)
4
Land
34,000
Cash
34,000
(Purchased land for cash)
8
Advertising Expense
1,800
Accounts Payable
1,800
(Incurred advertising
expense on account)
11
Salaries and Wages Expense
1,500
Cash
1,500
(Paid salaries)
12
No entry—Not a transaction.
13
Prepaid Insurance
1,500
Cash
1,500
(Paid for one-year
insurance policy)
17
Dividends
1,400
Cash
1,400
(Declared and paid a cash
dividend)
20
Cash
6,400
Service Revenue
6,400
(Received cash for services
performed)
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 25
Cash Unearned Service Revenue (Received cash for future services)
3,000
3,000
30
Cash Service Revenue (Received cash for services performed)