On August 1, 20Y5, Rafael Masey established Planet Realty, which completed the following transactions during the month: a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business, $17,500.
b. Purchased supplies on account, $2,300.
c. Earned fees, receiving cash, $13,300.
d. Paid rent on office and equipment for the month, $3,000.
e. Paid creditor on account, $1,150.
f. Withdrew cash for personal use, $1,800.
g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses, $400.
h. Paid office salaries, $2,800.
i. Determined that the cost of supplies used was $1,050.

Required:
Journal Entries and Trial Balance

a. Dr Cash17,500

Cr Common Stock 17,500

b. DrSupplies2,300

Cr Account payable 2,300

c. Dr Cash13,300

Cr Sales commission 13,300

d. Dr Rent expense3,000

Cr Cash 3,000

e. Dr Account payable1,150

Cr Cash 1,150

f. Dr Dividend1,800

Cr Cash 1,800

g. Dr Automobile expense1,500

Dr Miscellaneous expense400

Cr Cash 1,900

h. Dr Salaries expense2,800

Cr Cash 2,800

I. Dr Supplies expense1,050

Cr Supplies 1,050

Explanation:

Preparation of Journal entries

a. Based on the information given we were told that the amount of $17,500 was transferred from a personal bank account to an account that is to be used for business which means that the Journal entry will be:

Dr Cash17,500

Cr Common Stock 17,500

b. Based on the information given we were told that Purchased supplies on account was the amount of $2,300 which means that the Journal entry will be:

DrSupplies2,300

Cr Account payable 2,300

c. Based on the information given we were told that they Earned fees receiving cash of $13,300 which means that the Journal entry will be:

Dr Cash13,300

Cr Sales commission 13,300

d. Based on the information given we were told they Paid rent on office and equipment of the amount of $3,000 which means that the Journal entry will be:

Dr Rent expense3,000

Cr Cash 3,000

e. Based on the information given we were told that they Paid creditor on account for the amount $1,150 which means that the Journal entry will be:

Dr Account payable1,150

Cr Cash 1,150

f. Based on the information given we were told that they Withdrew cash for personal use of the amount of $1,800 which means that the Journal entry will be:

Dr Dividend1,800

Cr Cash 1,800

g. Based on the information given we were told that they paid automobile expenses which include rental charge for month, costing $1,500, and miscellaneous expenses costing $400 which means that the Journal entry will be:

Dr Automobile expense1,500

Dr Miscellaneous expense400

Cr Cash 1,900

h. Based on the information given we were told that they Paid office salaries of the amount of $2,800 which means that the Journal entry will be:

Dr Salaries expense2,800

Cr Cash 2,800

i. Based on the information given we were told that the cost of supplies used was the amount of $1,050 which means that the Journal entry will be:

Dr Supplies expense1,050

Cr Supplies 1,050

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