St Thomas Yacht Services Inc had the following transactions

St Thomas Yacht Services, Inc. had the following transactions during its first month of operations Borrowed $50 000 from last day of the month. Dec 2 First Bank after signing a 10 year, 6% promissory note. Payments are due on the 40) 20) /28] /15] 5) 7 Signed lease and paid the landlord $1,200 rent for the current month. Dec 12 Purchased a one year insurance policy for $2,100 Dec 15 Purchased $1,800 of supplies on account. Dec 18 Paid $340 to have advertising materials to be used during the current month. Dec 23 Detailed 8 sailboats competing in the Maxi Yacht Rolex Cup this March. The bookkeeper sent an invoice Dec 30 for $10,000. Received $5,000 in advance from a customer to clean two 63 foot yachts next month. Dec 25 Dec 29 Paid $54 in wages to employees who cleaned Serendipity and $81 in wages to employees who distributed advertising materials. (Ignore payroll taxes for this problem). Dec 30 Sent a $2,200 invoice to Serendipity\'s Captain Samantha for services provided on account. Dec 31 Paid First Bank $555 for the first payment on the loan signed on December 2nd Complete Step 2 of the Accounting Cycle: Prepare journal entries of the transactions. Date Description Debit Credit Dec 2 Dec 7 Dec 12

Solution

02-Dec Cash 50000         Notes payable 50000 07-Dec rent expense 1200           Cash 1200 12-Dec Prepaid insurance 2100            Cash 2100 15-Dec Supplies 1800           accounts payable 1800 18-Dec Advertising expense 340            Cash 340 23-Dec Accounts receivable 10000           service revenue 10000 25-Dec Cash 5000          Unearned service revenue 5000 29-Dec Wages expense 135 (54+81)           Cash 135 30-Dec Accounts receivable 2200           service revenue 2200 31-Dec Notes payable 305 Interest expense 50000*6%*1/12 250           Cash 555