Question

6. Journal entries. Record each of the following transactions in general journal format. a. Issued 50,000 shares of $1 par capital stock for $35 each. b. Billed customers for services provided, $10,000. c. Purchased supplies on account, $3,000. d. Paid monthly utility bill, $1,500 e. Verified 20 percent increase in market price of stock. f. Paid wages for the current month, $6,000. g. Purchased equipment with a list price of $50,000 by making a 20 percent down payment and financing the remainder with a six-month, 12 percent note payable. h. Collected cash from customers, $5,000. i. Paid vendors, $1,400. j. Recorded one month's accrued interest on note payable.

Answer 1

Requirement:

Transaction #	Accounts title	Debit	Credit
1	Cash	$1,750,000
	Common Stock		$50,000
	Paid in capital in excess of par - Common Stock		$1,700,000
	(Stock issued)
2	Accounts receivables	$10,000
	Service Revenue		$10,000
	(Customer billed)
3	Supplies	$3,000
	Accounts Payable		$3,000
	(Purchased supplies on account)
4	Utilities expense	$1,500
	Cash		$1,500
	(utilities paid)
5	NO ENTRY
6	Wages expenses	$6,000
	Cash		$6,000
	(wages paid)
7	Equipment	$50,000
	Cash [50000 x 20%]		$10,000
	Notes Payable		$40,000
	(Equipment purchased)
8	Cash	$5,000
	Accounts receivables		$5,000
	(Cash collected)
9	Accounts Payable	$1,400
	Cash		$1,400
	(Vendor paid in cash)
10	Interest expense	$400
	Interest Payable (40000 x 12% x 1/12]		$400
	(1 month interest accrued)