Question

Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

The following are the transactions of Spotlighter, Inc., for the month of January. Borrowed $4,040 from a local bank on a note due in six months. Received $4,730 cash from investors and issued common stock to them. Purchased $1,200 in equipment, paying $300 cash and promising the rest on a note due in one year. Paid $400 cash for supplies. Bought and received $800 of supplies on account. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.)

1. (Sample) Borrowed $4,240 from a local bank on a note due in six months.
2. Received $4,930 cash from investors and issued common stock to them.
3. Purchased $1,300 in equipment, paying $350 cash and promising the rest on a note due in one year.
4. Paid $450 cash for supplies.
5. Bought and received $850 of supplies on account.

Assets = Liabilities + Stockholde's equity

4240 4240(notes payable shorterm)

Answer 1

		Journal Entries
		Account titles & Explanations						Debit	Credit
	a.	Cash						4,240
		Notes payable							4,240
	b.	cash						4,930
		common stock							4,930
	c.	Equipment						1,300
		cash							350
		notes payable							950
	d.	Supplies						450
		cash							450
	e.	supplies						850
		Accounts payable							850
	Assets		Equipment	=	liabilties		+	Equity
	cash	supplies			A/P	notes		Common stock
						payable
a.	4,240					4,240
b.	4,930							4,930
c.	-350		1,300			950
d.	-450	450
e.	850				850