Problem 3-5A (Algo) Applying the accounting cycle LO P1, P3, P4, P5, P6 On April 1, Jiro Nozomi created a new travel agency, Adventure Travel. The following transactions occurred during the company's first month. April 2 Nozomi invested $$ \$ 37,000 $$ cash and computer equipment worth $$ \$ 25,000 $$ in the company in exchange for its common stock. April 3 The company rented furnished office space by paying $$ \$ 2,500 $$ cash for the first month's (April) rent. April 4 The company purchased $$ \$ 1,400 $$ of office supplies for cash. April 10 The company paid $$ \$ 2,160 $$ cash for a $$ 12- $$ month insurance policy. Coverage begins on April 11 . April 14 The company paid $$ \$ 1,400 $$ cash for two weeks' salaries earned by employees. April 24 The company collected $$ \$ 10,000 $$ cash for commissions revenue. April 28 The company paid $$ \$ 1,400 $$ cash for two weeks' salaries earned by employees. April 29 The company paid $$ \$ 550 $$ cash for minor repairs to computer equipment. April 30 The company paid $$ \$ 1,000 $$ cash for this month's telephone bill. April 30 The company paid $$ \$ 1,600 $$ cash in dividends.

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**Journal Entries**

**April 2**  
- Debit: Cash $$ \$37,\!000 $$  
- Debit: Computer Equipment $$ \$25,\!000 $$  
- Credit: Common Stock $$ \$62,\!000 $$

**April 3**  
- Debit: Rent Expense $$ \$2,\!500 $$  
- Credit: Cash $$ \$2,\!500 $$

**April 4**  
- Debit: Office Supplies $$ \$1,\!400 $$  
- Credit: Cash $$ \$1,\!400 $$

**April 10**  
- Debit: Prepaid Insurance $$ \$2,\!160 $$  
- Credit: Cash $$ \$2,\!160 $$

*(Note: The policy covers 12 months starting April 11.)*

**April 14**  
- Debit: Salaries Expense $$ \$1,\!400 $$  
- Credit: Cash $$ \$1,\!400 $$

**April 24**  
- Debit: Cash $$ \$10,\!000 $$  
- Credit: Commissions Revenue $$ \$10,\!000 $$

**April 28**  
- Debit: Salaries Expense $$ \$1,\!400 $$  
- Credit: Cash $$ \$1,\!400 $$

**April 29**  
- Debit: Repairs and Maintenance Expense $$ \$550 $$  
- Credit: Cash $$ \$550 $$

**April 30 (Telephone Bill)**  
- Debit: Telephone Expense $$ \$1,\!000 $$  
- Credit: Cash $$ \$1,\!000 $$

**April 30 (Dividends)**  
- Debit: Dividends $$ \$1,\!600 $$  
- Credit: Cash $$ \$1,\!600 $$
**Journal Entries for Adventure Travel for April** 1. **April 2** - **Debit:** Cash $$ \$37,000 $$ - **Debit:** Computer Equipment $$ \$25,000 $$ - **Credit:** Common Stock $$ \$62,000 $$ 2. **April 3** - **Debit:** Rent Expense $$ \$2,500 $$ - **Credit:** Cash $$ \$2,500 $$ 3. **April 4** - **Debit:** Office Supplies $$ \$1,400 $$ - **Credit:** Cash $$ \$1,400 $$ 4. **April 10** - **Debit:** Prepaid Insurance $$ \$2,160 $$ - **Credit:** Cash $$ \$2,160 $$ 5. **April 14** - **Debit:** Salaries Expense $$ \$1,400 $$ - **Credit:** Cash $$ \$1,400 $$ 6. **April 24** - **Debit:** Cash $$ \$10,000 $$ - **Credit:** Commissions Revenue $$ \$10,000 $$ 7. **April 28** - **Debit:** Salaries Expense $$ \$1,400 $$ - **Credit:** Cash $$ \$1,400 $$ 8. **April 29** - **Debit:** Repairs and Maintenance Expense $$ \$550 $$ - **Credit:** Cash $$ \$550 $$ 9. **April 30 (Telephone Bill)** - **Debit:** Telephone Expense $$ \$1,000 $$ - **Credit:** Cash $$ \$1,000 $$ 10. **April 30 (Dividends)** - **Debit:** Dividends $$ \$1,600 $$ - **Credit:** Cash $$ \$1,600 $$

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