Question

Following are the transactions of Dennen, Inc., for the month of January.

1. Borrowed $26,500 from a local bank.

2. Lent $10,000 to an affiliate; accepted a note due in one year.

3. Sold to investors 100 additional shares of stock with a par value of $0.10 per share and a market price of $20 per share; received cash.

4. Purchased $31,000 of equipment, paying $5,600 cash and signing a note for the rest due in one year.

5. Declared and paid $1,500 in dividends to stockholders.

For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts and determine ending account balances. Beginning balances are provided.

Beg. Bal. Cash 1,000 26,500 Beg. Bal. f(b) 1.200 10,000 (C) 10,000f(b) End. Bal. 11.200 End. Bal. f 13,900 Equipment 20,000 31,000 Beg. Bal. (d) Beg. Bal. Notes Payable 2,100 26,500 (a) 25,400 (d) End. Bal. 51,000 End. Bal. 54,000 Common Stock 2,650 101(c) Additional Paid-in Capital Beg. Bal. 1,000 Beg. Bal. End. Bal. 2,660 End. Bal. 1,000 Retained Earnings 16,450 Beg. Bal. End. Bal. 16.450

Answer 1

Cash Date Particulars To Beginning balance To Notes Payable To Common stock To Additional paid in capital Debit $ 1,000 26,500 Date Particulars By Notes Receivable By Equipment By Retained earnings By Ending balance Credit $ 10,000 5,600 1,500 12,400 29,500 10 1,990 29,500 Date Particulars Credit $ Notes Receivable Date Particulars To Beginning balance To Cash Debit $ 1,200 10,000 11,200 By Ending balance 11,200 11,200 Date Particulars Credit $ Equipment Date Particulars To Beginning balance To Cash To Notes Payable Debit $ 20,000 5,600 25,400 51,000 By Ending balance 51,000 51,000 Notes Payable Date Particulars Debit $ Date Particulars By Beginning balance By Cash By Equipment Credit $ 2,100 26,500 25,400 54,000 To Ending balance 54,000 54,000 Common Stock Date Particulars Debit $ Date Particulars By Beginning balance By Cash Credit $ 2,650 10 2,660 To Ending balance 2,660 2,660 Additional paid in capital Date Particulars Debit $ Date Particulars By Beginning balance By Cash (100*(20-0.10)) Credit $ 1,000 1,990 2,990 To Ending balance 2,990 2,990 Date Credit $ Retained earnings Date Particulars To Cash To Ending balance Debit $ 1,500 14,950 16,450 Particulars By Beginning balance 16,450 16,450