Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

EXERCISE 2-3

Purpose:

(L.O. 4) This exercise will illustrate how to record transactions in the general journal.

Transactions for the J.Lo Motorcycle Repair Shop, Inc.. (from Exercise 1-2) for August 2014 are repeated below.

Marc Anthony owns and operates the J. Lo Motorcycle Repair Shop, Inc. A list of the transactions that take place in August 2014 follows:

1. August 1	Marc begins the business by investing $5,000 cash in the business in exchange for $5,000 of common stock.
2. August 2	J. Lo Motorcycle Repair Shop, Inc. rents space for the shop behind a strip mall and pays August rent of $800.
3. August 3	J. Lo Motorcycle Repair Shop, Inc. purchases supplies for cash, $3,000.
4. August 4	J. Lo Motorcycle Repair Shop, Inc. pays Cupboard News, a local newspaper, $300 for an ad appearing in the Sunday edition.
5. August 5	J. Lo Motorcycle Repair Shop, Inc. repairs a cycle for a customer. The customer pays cash of $1,300 for services rendered.
6. August 11	J. Lo Motorcycle Repair Shop, Inc. repairs a cycle for a customer, Ben Affleck, on credit, $500.
7. August 13	J. Lo Motorcycle Repair Shop, Inc. purchases supplies for $900 by paying cash of $200 and charging the rest on account.
8. August 14	J. Lo Motorcycle Repair Shop, Inc. repairs a Harley for Zonie Kinkennon, a champion rider, for $1,900. J. Lo Motorcycle Repair Shop, Inc. collects $1,000 in cash and puts the rest on account.
9. August 24	J. Lo Motorcycle Repair Shop, Inc. collects cash of $400 from ...