Journalize the following selected transactions of Miramax Rentals. Omit explanations. Aug. 1 Purchased two new saws on credit at $425 each. The saws are added to Mirmax's rental inventory. Payment is due in 30 days.
8 Accepted advance deposits of $125 for tool rentals that will be applied to the cash rental when the tools are returned.
20 Charged customers $1,250 on account for tool rentals. Payment is due within 30 days.
31 Paid utility bill for the month, $180.
31 Received $600 in payments from the customers that were billed for rentals on August 20.

Answer and Explanation:

The journal entries are shown below:

On Aug 1

Inventory  Dr     $850

      To Accounts payable $850

(Being inventory purchased on account)

On Aug 8

Cash Dr     $125

      To Advance deposit a/c $125

(Being cash receipts is recorded)

On Aug 20

Accounts Receivable Dr $1250

         To Rental Revenue  $1250

(Being revenue is recorded)

On Aug 31

Utility expense Dr $180

       To Cash $180

(Being cash paid is recorded)

On Aug 31

Cash Dr $600

      To Accounts Receivable a/c $600

(Being cash received is recorded)

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