[Janelle101]

Can anyone please help me with this problem. I tried and tried. :mad:

July 1. Bills are sent to clients for services provided in June in the amount of $800.
July 8. First Bank loans the company $2,500. The company will pay back the loan in August.
July 9. Office Supply Corp. delivers furniture ($1,060) and expendable office supplies ($160) to Random, leaving an invoice for $1,220.
July 15. Payment is made to Office Supply Corp. for the furniture and office supplies delivered on July 9.
July 23. A $430 bill for electricity for the month of June is received and will be paid on its due date in August.
July 31. Salaries are paid to employees in the amount of $850.

This is my working: What am I doing incorrect
July 1 – cash – 800 (debit) Retained Earning – 800 (credit)
July 8 – Cash – 2,500 (debit) Accounts Payable 2,500 (credit)
July 9 – Office Equipment – 160 (debit) Office Furniture – 1,060 (debit) Accounts Payable – 1,220 (credit)
July 15 – Accounts Payable – 1,220 (debit) Cash – 1,220 (credit)
July 23 – Utilities Expense – 430 (debit) Cash 430 (credit)
July 31 – Salaries Expense – 850 (debit) Cash – 850 (credit)

[pready]

Jul 1 - This posting is incorrect. You need to analyze the transaction. You did not receive cash, so cash is the wrong account. You provided services to a client and sent a bill to a client for services rendered, so the client owes you money. Retained Earnings is not affected, at this point in the accounting cycle. The accounts affected are Accounts Receivable and Service Revenue.

Jul 8 - This is correct, you received money from the bank, so you owe the bank money.

Jul 9 One account is wrong. What did you receive. You received Furniture (PP&E) and Office Supplies. The other account is A/P.

Jul 15 - This is correct.

Jul 23 - This is incorrect. You received a bill, but did not pay it, so the acocunts affected are Utilities Expense and Accounts Payable. When the Bill is paid the accounts that will be affected are Cash and Accounts Payable.

Jul 31 - This is correct.

[morgaine300]

With one tiny possible exception... July 8: if it were me, I'd put that in Notes Payable instead of Accounts Payable. Technically something from a bank is going to be a note. However, usually problems will call it a note when it's a note, so they may actually want the Accounts Payable.

Just throwing that out...

[Janelle101]

Thank you.

[pready]

Morgaine300 is correct about the Jul 8 entry. Usually a loan from a Bank is a Notes Payable, not an Accounts Payable because you will have interest to pay on the loan.