Journal Entries

Question 1

Allowance For Uncollectible Accounts

+

Writing Off

Answer 1

12-31-X5
D: Uncollectible Accounts Expense 75,000
CR: Allow. for Uncollectible Accounts 75,000

To add 3% of sales to the allowance account ($2,500,000 X 3% = $75,000)

Write off

3-15-X3
D: Allow. for Uncollectible Accounts 1,000
Cr: Accounts Receivable 1,000

Question 2

Sale of an Asset

Answer 2

D: Cash 10k
D: Accumulative Depreciation 75k
D: Loss 10k
Cr: Equipment 100k

Sold equipment that cost 100k, for 10k.

Question 3

Cash Dividend

Declaration + Payment

Answer 3

Declaration:
D: Dividends
Cr: Dividends Payable

Payment of Dividends
D: Dividends Payable
Cr: Cash

Question 4

Collecting Accounts Receivable

Answer 4

D: Cash

Cr: A/R

Question 5

Buying Asset with cash + note

Answer 5

D: Land 10k
Cr: Cash 2k
Cr: Accounts payable 8k

Question 6

Depreciation Expense

To record annual depreciation expense

Answer 6

Depreciation Expense 20k

Accumulated Depreciation 20k

Question 7

Dividend Income

Receipt of Dividend Income

Answer 7

Cash 20k

Dividend Income 20k

Question 8

Accrued Expense

Answer 8

Salary Expense 20k

Salary Payable 20k

Question 9

Expense paid w/ cash

Answer 9

Advertising Expense 20k

Cash 20k

Question 10

Investments in AFS Securities

unrealized loss

Unrealized gain

Answer 10

Available for Sale Securities 20k
Cash 20k

Unrealized Gains/Losses OCI 1k
Available for Sale Securities 1k

To record a derease in the value of shares

Available for Sale Securities 1k
Unrealized Gains/Losses OCI 1k
To record an increase in the value of shares

Question 11

Bonds At Discount

Answer 11

-

Question 12

Bonds at Premium

Answer 12

-

Question 13

Investments using Equity Method

+
Investee reports an increase in retain earnings aka net income

+

Receipt of Dividends

Answer 13

Investment in Company
Cash

Investment in Company
Investment Income

Cash
Investment in Company

^dividends lower your investment income

Question 14

Trading Securities

Answer 14

Trading Securities

Cash

Question 15

Issuing Common Stock with No Par

Answer 15

Cash 100k

Common Stock 100k

Question 16

Par Value Stock

Applies for both common + preferred

Answer 16

Cash 40k
Common Stock 10k
Addt paid in capital 30k

Question 17

Sale of Goods

Record the sale
once that happens, inventory depletes.

Answer 17

Accounts Receivable 15k
Sales 15k

COGS 10k
Inventory 10k

Question 18

Discount Note Payable

Record Discount Amortization

Answer 18

Cash 9k
Discount 1k
Note Payable 10k

Discount Amortization
Interest Expense 100
Discount 100

Question 19

Perpetual Inventory

Aka inventory on account

Answer 19

Inventory

Accounts Payable

Question 20

Prepaid + When you recognize

Answer 20

Prepaid Rent
Cash

Rent Expense
Prepaid Rent

Question 21

Retirement of Debt

Answer 21

-

Question 22

Accrued Revenue

Answer 22

Accounts Receivable

Revenue

Question 23

Revenue Cash

Answer 23

Cash

Sales Revenue

Question 24

Sales + Sales Return

Answer 24

Accounts Receivable
Sales

Sales Returns and Allowances
Accounts Receivable

Question 25

Issuance of a small STOCK dividend

Answer 25

Use PAR

Retained Earnings
Common Stock
APIC

Question 26

Issuance of a large STOCK dividend

Answer 26

Retained Earnings xxx

Common Stock xxx

Question 27

Treasury Stock Purchase

Answer 27

Treasury Stock

Cash

Question 28

Treasury Stock Reissuance

Answer 28

Above Cost

Cash
Treasury Stock
APIC

Below Cost

Cash x
APIC xx
Treasury Stock xxx

Note: If APIC wasnt enough, retain earnings takes a hit

Question 29

Unearned Revenue

Answer 29

Cash
Unearned Revenue

Recognize

Unearned Revenue
Revenue