Question

Homework i Help Ryan Terlecki organized a new Internet company, CapUniverse, Inc. The company specializes in baseball-type caps with logos printed on them. Ryan, who is never without a cap, believes that his target market is college and high school students. You have been hired to record the transactions occurring in the first month of operations. a. Issued 2,800 shares of $0.01 par value common stock to investors for cash at $28 per share. b. Borrowed $63,000 from the bank to provide additional funding to begin operations, the note is due in two years. c. Paid $2,500 cash for rent of a warehouse: $1,250 for the current month's rent and another $1,250 for next month's rent. d. Paid $1,800 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense). e. Purchased furniture and fixtures for the warehouse for $12,000, paying $2,600 cash and the rest on account. The amount is due within 30 days. f. Purchased for $3,100 cash The University of Pennsylvania, Notre Dame, The University of Texas at Austin, The Ohio State University, and Michigan State University baseball caps as inventory to sell online. 9. Placed advertisements on Google for a total of $310 cash; the ads were run immediately. h. Sold caps totaling $1,700, half of which was charged on account. The cost of the caps sold was $900. (Hint: Make two entries.) 1. Made full payment for the furniture and fixtures purchased on account in (e). j. Received $280 from a customer on account. Required: Prepare journal entries for each transaction. Note that transaction (n) will require two entries, one for revenue and one for the related expense. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 6 7 8 Issued 2,800 shares of $0.01 par value common stock to investors for cash at $28 per share.

Answer 1

Answer-

SOLUTION

S.No.	Accounts titles and Explanation	Debit ($)	Credit ($)
a.	Cash (2,800*$28)	78,400
	Common Stock (2,800*$0.01)		28
	Additional paid in capital		78,372
b.	Cash	63,000
	Note payable		63,000
c.	Warehouse rent	1,250
	Prepaid Warehouse rent	1,250
	Cash		2,500
d.	Prepaid insurance	1,800
	Cash		1,800
e.	Furniture and fixtures	12,000
	Cash		2,600
	Accounts payable		9,400
f.	Inventory	3,100
	Cash		3,100
g.	Advertising expense	310
	Cash		310
h.	Cash	850
	Accounts receivable	850
	Cash revenue		1,700
	Cost of goods sold	900
	Inventory		900
i.	Accounts payable	9,400
	Cash		9,400
j.	Cash	280
	Accounts receivable		280