Question

journal entries for the following:

Jan. 1) Issued common stock in exchange for $10,000 cash.

Jan. 31) Rent payment of $2,250 for January 2021, which was paid on December 1, 2020, expires

Feb. 15) Purchased inventory on account for $30,000 (the perpetual inventory system is used).

Mar. 1) Lent a supplier $44,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.

Apr. 1) Paid an insurance company $4,000 for a one-year fire insurance policy.

Apr. 20) Paid $10,000 to suppliers for the merchandise purchased in 2020 and on February 15, 2021.

July 1) Received a $5,500 invoice from the local newspaper requesting payment for an advertisement that Patina placed. Check was sent on the same day.

July 8) Purchased supplies with $2,400 cash.

Oct 1) Borrowed $30,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.

Feb~Nov) Paid rent for $1,250 each month.

Dec 1) $3,500 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $1,250 per month.

Dec 1) A customer paid Pastina $5,500 in December for 1,900 pounds of spaghetti to be delivered in January 2022.

Dec 15) $12,000 in cash dividends were paid to shareholders.

Jan~Dec) Sold pasta on account for $121,000. The cost of the pasta was $15,000.

Jan~Dec) Collected $110,000 on account from customers.

Jan~Dec) Paid $3,000 in total to the local utility company for gas and electricity.

Answer 1

Date Credit Debit 10,000 Jan'1 $ Journal Entry Cash a/c To Commom Stock a/c (issued common stock in exchange for $10,000 cash.) $ 10,000 Jan 31 2,250 Rent a/c $ To Cash a/c (Rent payment of $2,250 for January 2021, which was paid on December 1, 2020, expires) $ 2,250 feb'15 $ 30,000 Inventory a/c To Accounts Payable a/c Purchased inventory on account for $30,000 (the perpetual inventory system is used). $ 30,000 Mar'i $ 44,000 $ 44,000 8% Note a/c (Asset) To Cash a/c Lent a supplier $44,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022. April'i $ 4,000 Prepaid Insurance a/c To Cash a/c (Paid an insurance company $4,000 for a one-year fire insurance policy) $ 4,000

April'20 $ 10,000 $ 10,000 Accounts Payable a/c To Cash a/c (Paid $10,000 to suppliers for the merchandise purchased in 2020 and on February 15, 2021) July'1 $ 5,500 $ 5,500 Advertisement a/c To Bank a/c (Received a $5,500 invoice from the local newspaper requesting payment for an advertisement that Patina placed. Check was sent on the same day) July's 2,400 Supplies a/c To Cash (Purchased supplies with $2,400 cash.) $ 2,400 Oct 1 $ 30,000 $ 30,000 12% Note Payable To Bank a/c (Borrowed $30,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years) 12,500 Feb Nov Rent a/c To Cash a/c (Rent paid for Feb) $ 12,500

Dec'1 $ 3,500 Advance Rent a/c To Cash a/c |(Amount paid to land owner for Dec and Jan Rent) $ 3,500 Dec'i $ 5,500 Cash a/c To Advance from Customer a/c (Advance received from customer) $ 5,500 Dec'15 $ 12,000 Dividend a/c To Cash a/c (Dividend Paid) $ 12,000 $ 121,000 Accounts Receivable a/c To Pasta a/c To Profit on sale Pasta a/c (Sold pasta on account for $121,000. The cost of the pasta was $15,000) $ $ 15,000 106,000 $ 110,000 Jan Dec Cash a/c To Accounts Receivable a/c (Collected $110,000 on account from customers) $ 110,000 $ 3,000 Jan Dec Gas and electricity To Cash a/c (Paid $3,000 in total to the local utility company for gas and electricity) $ 3,000