Question

The following transactions occurred during the month of June 2018 for the Stridewell Corporation. The company owns and operates a retail shoe store.

1. Issued 150,000 shares of common stock in exchange for $750,000 cash.
2. Purchased furniture and fixtures at a cost of $121,250. $48,500 was paid in cash and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $300,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $510,000. The cost of the goods sold was $255,000.
5. Paid $7,000 in rent on the store building for the month of June.
6. Paid $3,600 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2018.
7. Paid $216,750 on account for the merchandise purchased in 3.
8. Collected $102,000 from customers on account.
9. Paid shareholders a cash dividend of $7,500.
10. Recorded depreciation expense of $2,425 for the month on the furniture and fixtures.
11. Recorded the amount of prepaid insurance that expired for the month.

Required:
Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Transaction	Account title	Debit	Credit
1	Cash	$ 750,000
	Common stock		$ 750,000
2	Furnitures and fixtures	$ 121,250
	Cash		$ 48,500
	Accounts payable		$ 72,750
3	Inventory	$ 300,000
	Accounts payable		$ 300,000
4	Accounts receivable	$ 510,000
	Salese revenue		$ 510,000
	Cost of goods sold	$ 255,000
	Inventory		$ 255,000
5	Rent expense	$ 7,000
	Cash		$ 7,000
6	Prepaid insurance	$ 3,600
	Cash		$ 3,600
7	Accounts payable	$ 216,750
	Cash		$ 216,750
8	Cash	$ 102,000
	Accounts receivable		$ 102,000
9	Cash dividend	$ 7,500
	Cash		$ 7,500
10	Depreciation expense	$ 2,425
	Accumulated depreciation-Furnitures and fixtures		$ 2,425
11	Insurance expense (3,600/12)	$ 300
	Prepaid insurance		$ 300