Question

Bailey Delivery Company, Inc., was organized in 2018 in Wisconsin. The following transactions occurred during the year: a. Received cash from investors in exchange for 11,000 shares of stock (par value of $1.00 per share) with a market value of $6 per share. b. Purchased land in Wisconsin for $23,000, signing a one-year note (ignore interest). c. Bought two used delivery trucks for operating purposes at the start of the year at a cost of $11,000 each; paid $3,000 cash and signed a note due in three years for the rest (ignore interest). d. Paid $2,200 cash to a truck repair shop for a new motor for one of the trucks. (Increase the account you used to record the purchase of the trucks because the productive life of the truck has been improved) e. Sold one-fourth of the land for $5,750 to Pablo Development Corporation, which signed a six-month note. f. Stockholder Helen Bailey paid $28,200 cash for a vacant lot (land) in Canada for her personal use. Required: 1. Using the T-accounts, record the effects of transactions (a) through (f) by Bailey Delivery Company. Cash Short-Term Notes Receivable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Land Equipment 0 Beg. Bal. Beg. Bal. End. Bal. End. Bal. Short-Term Notes Payable Long-Term Notes Payable 0 Beg. Bal. 0 Beg. Bal. End. Bal. End. Bal. Common Stock Additional Paid-in Capital Beg. Bal. Beg. Bal. End. Bal. End. Bal.

Answer 1

Cash
Beg Bal	0	Equipment	3000
Common stock	66000	Equipment	2200
		Drawings	28200
		End Bal	32600
	66000		66000
Land
Beg Bal	0
Short term Note Payable	23000	Short term note receivable	5750
		End Bal	17250
	23000		23000
Short term notes payable
		Land	23000
End Bal	23000
	23000		23000
common stock
		Cash	11000
End Bal	11000
	11000		11000
Short term notes receivable
Land	5750	End Bal	5750
	5750		5750
Equipment
Cash	3000
Long term note payable	8000
Cash	2200	End Bal	13200
	13200		13200
Long term notes payable
		Equipment	8000
End Bal	8000
	8000		8000
Additional paid-in capital
end bal	55000	Cash	55000
	55000		55000