Reference no: EM131347

Problem I: Record the following transactions in a two-column journal. The transactions are for James E. Stone, who established an enterprise called the STONE INTERIOR DECORATING COMPANY on August 1 of this year. Refer to the following Chart of Accounts in selecting the accounts to be debited and credited.

11 Cash
12 Accounts Receivable
13 Supplies
14 Prepaid Insurance
15 Equipment
16 Truck
21 Accounts Payable
22 Notes Payable
31 James Stone, Capital
32 James Stone, Drawing
41 Sales
51 Rent Expense
52 Wages Expense
53 Truck Expense
59 Miscellaneous Expense

2007

August         1          Stone transferred cash from a personal bank account to an account to be used for the business. The amount of cash was $8,000.

                   16        Paid rent for the month, $1,500.

                   17        Purchased equipment on account, $1,350.

                   17        Purchased a truck for $5,600. He paid $2,700 cash and gave a note payable for the balance of $2,900.

                   19        Received cash for a decoration job completed, $3,000. (Use Sales account.)

                   22        Purchased supplies for cash, $800.

                   23        Paid the wages of the employees, $1,250

                   26        Paid creditor for the equipment purchased on August 17, $1,350.

                   27        Recorded sales on account, $3,280.

                   29        Paid the premiums on the property and casualty insurance for a year in advance, $580.

                   29        Paid truck expenses, $275.

                   29        Paid miscellaneous expenses, $125.

                   30        Received cash from customers on account, $2,100.

                   30       Paid wages of employees, $865.

                   31        Withdrew cash for personal use, $650.