Appendix I
Review Exercise Solutions
391
Chapter 4 Review Exercise—Solutions
a) Journal Entries
JOURNAL
Page 1
Date
Account Titles and Explanation
PR
Debit
Credit
2016
Jun 1 Rent Expense
540
900
Cash
101
900
Paid cash for month’s rent
Jun 3 Prepaid Insurance
110
1,200
Cash
101
1,200
Prepaid a one-year insurance policy
Jun 6 Cash
101
2,100
Service Revenue
400
2,100
Received cash for services
Jun 11 Advertising Expense
500
450
Accounts Payable
200
450
Received invoice for advertising
Jun 13 Cash
101
3,000
Gordon, Capital
300
3,000
Owner invested cash in business
Jun 16 Cash
101
300
Unearned Revenue
210
300
Received deposit from customer
Jun 18 Accounts Receivable
105
1,500
Service Revenue
400
1,500
Provided services on account
Jun 23 Bank Loan
215
950
Cash
101
950
Paid bank loan principal
Jun 30 Gordon, Drawings
310
1,000
Cash
101
1,000
Owner drawing for personal use
