Question

The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store. 1. Issued 115,000 shares common stock in exchange for $575,000 cash. 2. Purchased office equipment at a cost of $95.000. $38,000 was paid in cash and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $230,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $391,000. The cost of the goods sold was $195,500. 5. Paid $5,000 in rent on the store building for the month of June. 6. Paid $2,640 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021. 7. Paid $166,175 on account for the merchandise purchased in 3. 8. Collected $78,200 from customers on account. 9. Paid shareholders a cash dividend of $5,750. 10. Recorded depreciation expense of $1.900 for the month on the office equipment 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.) View transaction lit Journal entry worksheet 2 3 4 5 6 7 8 .... 12 Issued 115,000 shares of common stock in exchange for $575,000 cash. Note: Enter debts before credits Transaction General Journal Debit Credit 01 Racord entry Clear entry View general journal

Answer 1

The Journal Entries are as the following:

575,000 1 Cash Dr To Common Stock 575,000 95,000 2 Office Equipment Dr To Cash To Notes Payable 38,000 57,000 230,000 3 Inventory Dr To Accounts Payable 230,000 391,000 4 Accounts Receivables Dr To Sales 391,000 195,500 Cost of Goods Sold Dr To Inventory 195,500 5,000 5 Rental Expense Dr To Cash 5,000 2,640 6 Prepaid Insurance Dr To Cash 2,640 166,175 7 Accounts Payable Dr To Cash 166,175 78,200 8 Cash Dr To Accounts Receivables 78,200 5,750 9 Dividends Dr To Cash 5,750 1,900 10 Depreciation Expense Dr To Accumulated Depreciation (or Equipment) 1,900 220 11 Insurance Expense Dr (2640/12) To prepaid Insurance 220