Answer:
1. Accounts Receivables $16900 Dr
Service Revenue $16900 Cr
2. When supplies were purchased, the entry was
Supplies account $6400 Dr
Accounts payable $6400 Cr
At year end on December 31, the entry to adjust supplies is
Supplies expense $5200 Dr
Supplies Account $5200 Cr
Explanation:
1)
The sales were made on account which means they were made on credit. The entry to record credit sales is Accounts receivable debit and the service revenue credit as this revenue has been earned following the accrual basis and the payment against this is due to be received.
2)
The supplies are an asset and when they were purchased on account, the Supplies account is debited while Accounts payable against these supplies are credited as payment for these supplies are yet to be made.
On 31 december, we adjust the supplies account to calculate the supplies that have been used and transfer them to expense account.
The supplies expense is 6400- 1200 = 5200
Based on the information give the appropriate journal entry for the two transactions are:
Sye Chase journal entry
a. Journal entry
Debit Accounts Receivables $16900
Credit Service Revenue $16900
Debit Supplies account $6400
Credit Accounts payable $6400
Debit Supplies expense $5200
Credit Supplies Account $5200
($6400-$1200)
b. Journal entry
Debit Service revenue $16,900
Credit Income summary $16,900
Debit Income summary $5200
Credit Supplies expense $5200
Debit Income summary $11700
Credit Retained earnings $11700
($16900-$5200)
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