Terrapin Company engages in the following external transactions for November. Purchase equipment in exchange for cash of $22,400. Provide services to customers and receive cash of $6,000. Pay the current month's rent of $1,700. Purchase office supplies on account for $1,000. Pay employee salaries of $1,700 for the current month. Required: Record the transactions. Terrapin uses the following accounts: Cash, Supplies, Equipment, Accounts Payable, Service Revenue, Rent Expense, and Salaries Expense.

Question

Business

Taliyah Mills

29 October, 18:19

Terrapin Company engages in the following external transactions for November. Purchase equipment in exchange for cash of $22,400. Provide services to customers and receive cash of $6,000. Pay the current month's rent of $1,700. Purchase office supplies on account for $1,000. Pay employee salaries of $1,700 for the current month. Required: Record the transactions. Terrapin uses the following accounts: Cash, Supplies, Equipment, Accounts Payable, Service Revenue, Rent Expense, and Salaries Expense.

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Yadiel Cisneros · Answer 1

Purchase equipment in exchange for cash of $22,400

Debit Equipment account $22,400

Credit Cash account $22,400

Being entries to record the purchase of equipment for cash

Provide services to customers and receive cash of $6,000

Debit Cash account $6,000

Credit Service Revenue account $6,000

Being entries to recognize revenue earned from service rendered to customer.

Pay the current month's rent of $1,700

Debit Rent expense account $1,700

Credit Service Revenue account $1,700

Being entries to recognize the payment of rent expense.

Purchase office supplies on account for $1,000

Debit Supplies account $1,000

Credit Cash account $1,000

Being entries to recognize the payment for office supplies.

Pay employee salaries of $1,700 for the current month

Debit Salaries Expense account $1,700

Credit Cash account $1,700

Being entries to recognize the payment of employee's salaries.

Explanation:

Information given about Terrapin

Purchase equipment in exchange for cash of $22,400. Provide services to customers and receive cash of $6,000. Pay the current month's rent of $1,700. Purchase office supplies on account for $1,000. Pay employee salaries of $1,700 for the current month.

To record these transactions, the following entries will be posted

Purchase equipment in exchange for cash of $22,400

Debit Equipment account $22,400

Credit Cash account $22,400

Being entries to record the purchase of equipment for cash

Provide services to customers and receive cash of $6,000

Debit Cash account $6,000

Credit Service Revenue account $6,000

Being entries to recognize revenue earned from service rendered to customer.

Pay the current month's rent of $1,700

Debit Rent expense account $1,700

Credit Service Revenue account $1,700

Being entries to recognize the payment of rent expense.

Purchase office supplies on account for $1,000

Debit Supplies account $1,000

Credit Cash account $1,000

Being entries to recognize the payment for office supplies.

Pay employee salaries of $1,700 for the current month

Debit Salaries Expense account $1,700

Credit Cash account $1,700

Being entries to recognize the payment of employee's salaries.