Question

WireScape Co. engaged in the following transactions during the month of May: a. WireScape borrowed $15,000 from a bank, signing a note due in four years. b. WireScape loaned $6,500 to an affiliated company and accepted a note due in one year. c. WireScape issued 90 additional shares of common stock with a par value of $0.10/share. The shares were issued at a market price of $30/share. d. WireScape purchased $32,000 of equipment. WireScape paid $10,500 in cash for the equipment and signed a note for the balance due in 18 months. e. WireScape's Board of Directors declared dividends of $7,200, which will be paid on June 19. Prepare the journal entry to record each of the above transactions for the month of May. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Solution:
	Journal Entries
	Transaction	General Journal	Debit	Credit
	A	Cash	$                    15,000
		Note Payable		$                      15,000
	B	Note Receivable	$                       6,500
		Loan to Affilliate		$                        6,500
	C	Cash (90 Shares X $ 30)	$                       2,700
		Common Stock (90 Shares X $ 0.10)		$                                9
		Additional Paid in Capital - Common Stock		$                        2,691
	D	Equipment	$                    32,000
		Cash		$                      10,500
		Note Payable		$                      21,500
	E	Retained Earnings	$                       7,200
		Dividend Payable - Common Stock		$                        7,200