Question

c. a. (Sample) Borrowed $3,940 from a local bank on a note due in six months. b. Received $4.630 cash from investors and issued common stock to them. Purchased $1,000 in equipment, paying $200 cash and promising the rest on a note due in one year. d. Paid $300 cash for supplies. e. Bought and received $700 of supplies on account. Assets Cash Liabilities + Stockholders' Equity +3,940 Notes Payable (short-term) +3,940 a. Sample M2-10 Preparing Journal Entries For each of the transactions in M2-9 (including the sample), write the journal entry using the format shown in this chapter (omit explanations).

Answer 1

Solution:

Requirement:1

	Assets	=	Liabilities	+	Stockholders` Equity
a.	Cash + 3940		Notes Payable[short term] +3940
b.	Cash + 4630				Common Stock + 4630
c.	Equipment + 1000		Notes Payable[short term] +800
	Cash -200
d.	Supplies +300
	Cash -300
e.	Supplies +700		Accounts Payable +700

Requirement:2

Date	General Journal	Debit	Credit
a	Cash	$ 3,940.00
	Notes payable		$ 3,940.00
	to record notes payable
b	Cash	$ 4,630.00
	common stock		$ 4,630.00
	(To record common stock)
c	Equipment	$ 1,000.00
	Cash		$     200.00
	Notes payable		$     800.00
	to record equipment
d	Supplies	$     300.00
	Cash		$     300.00
	(To record supplies)
e	Supplies	$     700.00
	accounts payable		$     700.00
	(To record supplies)