The following are the transactions of Spotlighter, Inc., for the month of Januar

Question

The following are the transactions of Spotlighter, Inc., for the month of January. Borrowed $4,390 from a local bank on a note due in six months. Received $5,080 cash from investors and issued common stock to them. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year. Paid $750 cash for supplies. Bought and received $1,150 of supplies on account. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

the following will be the journal entries:

sno account deibt credit 1. Cash a/c $4,390 ...............To Notes payable a/c 4,390 (since cash received against note due in six months) 2. Cash a/c $5,080 ...............To Common stock a/c 5,080 3. equipment 1,900 ..............To cash a/c 650 ...............To Notes payable . 1,250 (notes payable = equipment amount - cash paid => 1,900-650 =>1,250) 4. Supplies a/c 750 ............To cash a/c 750 5 supplies a/c 1,150 ..............To accounts payable a/c 1,150

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