Question

Example One:

The following transactions apply to ABC, Inc. for May 2018, its first month of operations.

Record each of the following transactions in general journal form. ABC Inc. uses the perpetual inventory method.

May 1, issued 65,000 shares of $2 par common stock for $10 per share.

May 1, paid $3,200 for January’s utilities.

May 2, purchased $12,000 of supplies on account.

May 8, purchased $13,000 of merchandise, on account.

May 15, borrowed $20,000 by signing a 5%, 5-year note.

May 12, sold inventory for $16,000, on account. Cost of the merchandise was $9,000.

May 20, paid $8,000 on accounts payable.

May 21, received $11,000 on accounts receivable.

May 22, declared a $4,500 dividend with a date of record January 25.

May 30, paid the $4,500 dividend.

Date	Account Name	Debit	Credit
Date	Account Name	Debit	Credit

Answer 1

Date	Account	Debit	credit
may 1	cash [65000*10]	650000
	common stock [65000*2]		130000
	paid in capital in excess of par -common stock		520000
may 1	utilities payable	3200
	cash		3200
may 2	supplies	12000
	Accounts payable		12000
may8	merchandise inventory	8000
	accounts payable		8000
may 15	cash	20000
	note payable		20000
may 12	Accounts receivable	16000
	sales revenue		16000
	cost of goods sold	9000
	merchandise inventory		9000
may 20	accounts payable	8000
	cash		8000
may 21	cash	11000
	Accounts receivable		11000
may 22	cash dividend /Retained earning	4500
	dividend payable		4500
may 30	dividend payable	4500
	cash		4500