PLEASE ANSWER ALL OF THESE QUESTIONS

Assignment: Special Journals: Purchases and Cash Payments

Part 1 (10 points): Prepare a journal entry for the following transaction: On December 17, On Your Mark paid $1,500 to Keystone Insurance Company toward the premium for a six-month insurance policy, check No. 1001. *The Account debited is an asset not the name of the Insurance Company.

General Journal
Date	Description	Post. Ref.	Debit	Credit

Part 2 (16 points) Record your cash (or check) paid-out transactions. You are the owner of a store. You purchase items worth $7,800 on account from your main supplier. Most of the purchase is inventory for resale, but also includes office supplies worth $100. The following entry has been made in your Purchases Journal:

	Debit	Credit
Purchases	$7,700
Office supplies expense	$100
Accounts payable		$7,800

Next month, after receiving a statement from your supplier, you write a check to settle your account. Make the following entry in your Cash Receipts Journal:

	Debit	Credit
Accounts payable	$7,800
Cash		$7,800

Assume that your business is a retail store that sells merchandise for resale.

Record the following transactions in the Purchases or Cash Payments journal:

(Note: All dollar amounts have been rounded off to the nearest dollar.)

1) On February 2, you paid an electricity bill of $177.

2) Also on February 2, you bought merchandise inventory on account from Ash Wholesale at a cost of $9,500.

3) On February 5, you spent $82 at Atkins Service Station to fill up your delivery vehicles with gas. You charged it all to the account you maintain with Atkins.

4) On February 8, you write a check for $9,500 in payment of the bill you receive from Ash Wholesale.

5) On February 10, you write a check for $82 to Atkins Service Station to settle your account there.

Upon completion of this journal page, you should foot all amount columns.

Guidelines:

1. Check that all entries were recorded correctly, as you are using a double-entry accounting system.

2. Check to see if the sum of the debits equals the sum of the credits. Total debits: 0 + 9,582 + 9,500 + 82 + 177 = 19,341. Total credits: 9,759 + 9,582 = 19,341.

3. If the sum of the debit columns does not equal the sum of the credit columns, identify where the problem has occurred.

*You may have entered one of the amounts in the wrong column.

*You may have added the totals incorrectly. It is usually easy to pinpoint the error because the debits should equal the credits for each transaction.

Purchases Journal
Date	Invoice No.	Creditors Account Credited	Post Ref.	Accounts Payable Credit	Purchases Debit	General
						Account Debited	Post Ref.	Debit
Jan. 20				$7,800	$7,700			$100

Cash Payments Journal
Date	DOC No.	Account Name	Post Ref	General		Accounts Payable Debit	Purchases Discounts Credit	Cash in Bank Credit
				Debit	Credit
Feb. 1						$7,800		$7,800