John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.

Jan. 1 The business received $34,000 cash and issued common stock to Daniel.

2 Purchased medical supplies on account, $17,000.

4 Performed services for patients receiving $1,600.

12 Paid monthly office rent of $3,000.

15 Recorded $7,000 revenue for services rendered to patients on account.

Journalize the transactions of John Daniel, M. D. Include an explanation with each entry.

The journal entries are shown below:

1. Cash A/c Dr $34,000

To Common stock A/c $34,000

(Being the cash is received in exchange of common stock)

2. Medical supplied A/c Dr $17,000

To Account payable A/c $17,000

(Being the medical supplies are purchased on account)

3. Cash A/c Dr $1,600

To Service Revenue A/c $1,600

(Being the cash is received for service performed)

4. Office Rent Expenses A/c Dr $3,000

To Cash A/c $3,000

(Being the office rent expense is paid for cash)

5. Accounts Receivable A/c Dr $7,000

To Service revenue A/c $7,000

(Being the service revenue is recorded)