Pirates Incorporated had the following balances at the beginning of September. PIRATES INCORPORATED
Trial Balance
Accounts Debits Credits
Cash $5,500
Accounts Receivable 1,500
Supplies 6,600
Land 10,200
Accounts Payable 6,500
Notes Payable 2,000
Common Stock 8,000
Retained Earnings 7,300
The following transactions occur in September:
September 1 Provide services to customers for cash, $3,700.
September 2 Purchase land with a long-term note for $5,400 from Crimson Company.
September 4 Receive an invoice for $400 from the local newspaper for an advertisement that appeared on September 2.
September 8 Provide services to customers on account for $5,000.
September 10 Purchase supplies on account for $1,000.
September 13 Pay $3,000 to Crimson Company for a long-term note.
September 18 Receive $4,000 from customers on account.
September 20 Pay $800 for September's rent.
September 30 Pay September's utility bill of $1,500.
September 30 Pay employees $3,000 for salaries for the month of September.
September 30 Pay a cash dividend of $1,000 to shareholders.
Record each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal Entries:

September 1:

Debit Cash $3,700

Credit Service Revenue $3,700

To record the provision of services for cash.

September 2:

Debit Land $5,400

Credit Long-term Note Payable $5,400

To record the purchase of land from Crimson company.

September 8:

Debit Accounts Receivable $5,000

Credit Service Revenue $5,000

To record the provision of services on account.

September 10:

Debit Supplies $1,000

Credit Accounts Payable $1,000

To record the purchase of supplies on account.

September 13:

Debit Long-term Notes Payable $3,000

Credit Cash Account $3,000

To record the payment to Crimson Company on long-term note.

September 18:

Debit Cash Account $4,000

Credit Accounts Receivable $4,000

To record the cash receipt from customers.

September 20:

Debit Rent Expense $800

Credit Cash Account $800

To record the payment of September's rent.

September 30:

Debit Utilities Expense $1,500

Credit Cash Account $1,500

To record the payment of September's utility bill.

September 30:

Debit Salaries Expense $3,000

Credit Cash Account $3,000

To record the payment of salaries for the month.

September 30:

Debit Dividend $1,000

Credit Cash Account $1,000

To record the payment of cash dividend to shareholders.

Explanation:

a) PIRATES INCORPORATED

Trial Balance

As of September 1

Accounts                   Debits     Credits

Cash                        $5,500

Accounts Receivable 1,500

Supplies                    6,600

Land                        10,200

Accounts Payable                    6,500

Notes Payable                         2,000

Common Stock                       8,000

Retained Earnings                  7,300

Totals                  $23,800 $23,800

b) Pirates' Journal entries are made as business transactions occur on a daily basis.  They are the first set of records in the accounting books.  They identify the accounts to be debited and the accounts to be credited in the general ledger.

b is the correct answer

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