Recording Transactions Randi had a hard time finding a summer job when she went home from college, so she decided to go into business for herself mowing lawns. She had the following business activities during the month of June. June 1 Used $200 of her own money and borrowed $450 from her father to start the business.
2 Rented a used pickup truck from an uncle for $85 per month. Paid for the first month’s use.
3 Rented a lawnmower ($75 per month), an edger ($50 per month), and a wheelbarrow ($10 per month) at an equipment rental store. Paid the first month’s rental fees in full.
16 During the first two weeks, performed $528 of lawn mowing services. Customers paid in cash. Paid out $52 for gas, oil, and other supplies.
18 Paid $35 for a newspaper advertisement that had appeared earlier in the month.
30 During the last half of the month, performed $507 of lawn mowing services and collected the cash.
30 Paid out $107 for gas, oil, and other supplies.
30 Paid back one half of the amount she had borrowed from her father plus $5 for interest.
Randi knew from taking an accounting class at college that the following accounts would be needed to keep track of her business activities.
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Cash |
Equipment Rental Expense |
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Note Payable—Dad |
Contributed Capital |
|
Service Revenue |
Retained Earnings |
|
Gas and Oil Expense |
Advertising Expense |