Exercise 25 Presented below is information related to Lexing

Exercise 2-5 Presented below is information related to Lexington Real Estate Agency Oct. Diane Lexington begins business as a real estate agent with a cash investment of $28,922 in exchange for 1 common stock. 2 Hires an administrative assistant 3 Purchases office furniture for $3,326, on account 6 Sells a house and lot for N. Fennig; bills N. Fennig $5,206 for realty services performed. 27 Pays $1,229 on the balance related to the transaction of October 3. 30 Pays the administrative assistant $3,615 in salary for October.

Solution

Journal entries: Date Accounts title and explanations Debit $ Credit $ 1-Oct Cash account 28922      Common Stock capital 28922 2-Oct No entry for hiring 3-Oct Office Furniture Account Dr. 3326      Accounts payable 3326 6-Oct Accounts receivable Account Dr. 5206       Service revenue 5206 27-Oct Accounts payable Account Dr. 1229     Cash account 1229 30-Oct Administrative Salaries Account Dr. 3615       Cash account 3615