How to record a transaction
Hello I am really confused on how to record these transactions:
1. Amortized $60 of the discount on bonds payable.
This is how I recorded it:
Amortization Expense Debit $60
Discount on Bonds Payable Credit $60
Evidently the amortization expense is in correct. Could you please help?
2. Collected $9,874 of accounts receivables
This is how I recorded it:
Accounts Receivables Debit of $9,874
Cash Credit of $9,874
I am thinking that I should have reversed these accounts but I am not sure.
3. Bought Stock in Excellent Company for $950 in cash. Your company has no plans to sell the shares of stock in the next few years.
My Answer:
Marketable Securities Debit of $950
Cash Credit of $950
I am thinking that the marketable securities should be available for sale securities.
4. a fire destroyed $732 of merchandise and equipment which cost $1,426 and had a book value of $985. Filed insurance claim but have not received money from the insurance company. The fire was considered unusual and infrequent.
This is how I recorded it:
Extraordinary Loss on Merchandise and Equipment Debit 732
Merchandise and Equipment Credit 985
Depreciation Expense Debit 253
I was told to separate the merchandise and equipment and that the depreciation expense account is incorrect along with the figures of $732 and $985. I am so unsure what to do at this point.
5. Of the rent paid in part "M" above one of the months is in 2010. Rent paid during 2008 has expired.
"M" READS: Paid $2,700 of rent on February 1 to renew the one year lease which began in 2008.
I recorded M as:
Rent Expense Debit 2,700
Cash Credit 2,700
I recorded Question 5 as:
Prepaid Rent Debit 225
Rent Expense Credit 225
I was told that the account numbers for five are wrong. I changed the accounts on Question 5 from a debit of Rent Expense and a credit of prepaid rent to read what it says now.