On April 1, Adventures Travel Agency, Inc. began operations. The following transactions were completed during the month. 1. Issued common stock for $24,000 cash. 2. Obtained a bank loan for $7,000 by issuing a note payable. 3. Paid $11,000 cash to buy equipment. 4. Paid $1,200 cash for April office rent. 5. Paid $1,450 for supplies. 6. Purchased $600 of advertising in the Daily Herald, on account. 7. Performed services for $18,000: cash of $2,000 was received from customers, and the balance of $16,000 was billed to customers on account. 8. Paid $400 cash dividend to stockholders. 9. Paid the utility bill for the month, $2,000. 10. Paid Daily Herald the amount due in transaction (6). 11. Paid $40 of interest on the bank loan obtained in transaction (2). 12. Paid employees’ salaries, $6,400. 13. Received $12,000 cash from customers billed in transaction (7). 14. Paid income tax, $1,500.

Explanation:

Date     Transaction                     Debit                   Credit

01.04     Cash                              $24000

              Common stock                                         $24000

02/04     Cash                                $7000

               Notes Payable                                         $7000

03/04     Equipment                       $11000

               Cash                                                           $11000

04/04      Operating Expense          $1200

                Cash                                                           $1200

05/04       Equipment Expense          $1450

                  Cash                                                           $1450

06/04      Advertising                           $600

                Accounts Payable                                        $600

07/04      Accounts Receivable            $16000

               Cash                                       $2000

             Services performed                                           $18000

08/04     Equity                                      $400

               Cash                                                                  $400

09/04      Accounts Payable                   $2000

                 Cash                                                                  $2000

10/04      Accounts Payable                   $600

             Cash                                                                       $600

11/04     Accounts payable                     $7000

            Cash                                                                          $7000

12/04    Salaries and wages Expense    $6400

             Cash                                                                           $6400

13/04   Cash                                           $12000

           Service Revenue                                                          $12000

14/04   Tax Expense                            $1500

             Cash                                                                             $1500

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