Question

June Juniper receives an invoice on June 15 for legal fees as a result of starting the business. The invoice is in the amount of $450. The work has been completed, but the invoice has not been paid. Record the journal entries associated with this transaction.

Answer 1

The correct answer to this question is a journal entry that will record a debit to Legal Expense for $450 and a credit to Accounts Payable for $450.

This entry records that fact that the business has an expense for legal fees. It is also recording the fact that the company current has a debt that they need to pay.