Part 1: Proprietorship Business Transactions

Although many small businesses might operate on a cash basis, most of the larger ones use the accrual basis to record business events in the general journal. In this assessment, apply your knowledge of various business events that require journal entries to be made.

For this part of the assessment, use the Assessment 4, Part 1 Template to create journal entries for each of the following business events for Magnolia Greens Frisbee Golf Course:

• May 1: Invested $20,000 cash in the golf course business.
• May 3: Purchased Hampstead Golf Land for $15,000 cash. The price includes land $12,000, shed $2,000, and equipment $1,000.
• May 5: Paid advertising expenses of $700.
• May 6: Paid cash $600 for a 1-year insurance policy.
• May 10: Purchased golf discs and other equipment for $1,050 from Discs Are Us, payable in 30 days.
• May 18: Received $1,100 in cash for golf fees earned (service revenue).
• May 19: Sold 150 coupon books for $10 each. Each book contains four coupons that enable the holder to play one round of golf.
• May 25: Withdrew $800 cash for personal use.
• May 30: Pay salaries for part-time employees $250.
• May 30: Paid Discs Are Us the full amount due.
• May 31: Received $2,100 cash for fees earned.

Accounts to be used are given below:

• Cash.
• Prepaid insurance.
• Land.
• Buildings.
• Equipment.
• Accounts payable.
• Unearned service revenue.
• Owner's capital.
• Owner's drawings.
• Service revenue.
• Advertising expense.
• Salaries and wages expense.