Answer:
Schrand Aerobics, Inc.
a. Journal Entries:
Debit Accounts Payable $600
Credit Cash $600
To document the cash payment.
Debit Rent $3,600
Credit Cash $3,600
To document the cash payment.
Debit Accounts Receivable $11,500
Credit Service Revenue $11,500
To record the client billing.
Debit Advertising $500
Credit Accounts Payable $500
To document promotional expenses.
Debit Cash $10,000
Credit Accounts Receivable $10,000
To register the cash received.
Debit Wages $2,400
Credit Cash $2,400
To register the cash paid.
Debit Utilities $680
Credit Accounts Payable $680
To document utility costs.
Debit Interest $20
Credit Cash $20
To register interest payment on notes payable.
Debit Retained Earnings $900
Credit Cash $900
To document dividend payment.
Debit Equipment $4,000
Credit Cash $4,000
To document cash used for purchasing sound equipment.
b. T-Accounts:
Cash
Description Debit Credit Balance
Balance $5,000
Accounts payable $600 4,400
Rent 3,600 800
Accounts receivable 10,000 10,800
Wages 2,400 8,400
Interest 20 8,380
Dividend 900 7,480
Equipment 4,000 3,480
Accounts Receivable
Description Debit Credit Balance
Balance $5,200
Service Revenue 11,500 16,700
Cash 10,000 6,700
Equipment
Description Debit Credit Balance
Cash $4,000 $4,000
Notes Payable
Description Debit Credit Balance
Balance $2,500
Accounts Payable
Description Debit Credit Balance
Balance $1,000
Cash $600 400
Advertising $500 900
Utilities 680 1,580
Common Stock
Description Debit Credit Balance
Balance $5,500
Retained Earnings
Description Debit Credit Balance
Balance $1,200
Dividends $900 300
Services Revenue
Description Debit Credit Balance
Accounts receivable $11,500 $11,500
Rent Expense
Description Debit Credit Balance
Cash $3,600 $3,600
Advertising Expense
Description Debit Credit Balance
Accounts payable $500 $500
Wages Expense
Description Debit Credit Balance
Cash $2,400 $2,400
Utilities Expense
Description Debit Credit Balance
Utilities payable $680 $680
Interest Expense
Description Debit Credit Balance
Cash $20 $20
Explanation:
Journal entries provide the initial record of transactions using debits and credits to the relevant accounts.
T-accounts serve as general ledger accounts that summarize transactions and compute the balance for each account.