Record the Journal Entry On December 1, to prepare for expansion, FCM issued 1,0
ID: 2328326 • Letter: R
Question
Record the Journal Entry
On December 1, to prepare for expansion, FCM issued 1,000 shares of stock for $90 per share and signed a $20,000 note that is due November 20, 2022. The note carries a 4.5% annual rate of interest which is to be paid semi-annually so the first interest payment will be made May 31, 2018. (Do not forget to record accrued interest at the end of the year). On December 3, FCM purchased land for $100,000 on which to build a 4,000 sq. ft. facility.
On December 7, NBC Sports contacted FCM about a potential video project. On December 15, FCM paid $1,000 to a consultant to gather focus groups to determine if there was sufficient demand for the project NBC Sports proposed. On December 30, the consultant provided TCM with the report discussing the results of the focus groups
Explanation / Answer
Date Account titles and Explanation Debit Credit Dec 1. Cash (1000*90) 90000 Common stock 90000 (Assumed to be issuance of no par stock) (Issuance of common stock) Dec 1. Cash 20000 Notes payable 20000 (Issuance of 4.5% note) Dec 3. Land 100000 Cash 100000 (Land purchased) Dec 7. No entry Dec 15. Consulatncy expenses 1000 Cash 1000 (paid $1,000 to a consultant ) Dec 31. Interest expense (20000*4.5%*1/12) 75 Interest payable 75 (Interest on note due for one month)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.