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: a. Borrowed $4,540 from a local bank on a note due in six months. b. Received $5,230 cash from investors and issued common stock to them. c. Purchased $2,200 in equipment, paying $800 cash and promising the rest on a note due in one year. d. Paid $900 cash for supplies. e. Bought and received $1,300 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

Journal entries

No.

Account

Debit

Credit

a

Cash

4,540

To note payable

4,540

b.

Cash

5,230

To Common Stock

5,230

c.

Equipment

2,200

To Cash

   800

To Note payable

1,400

d.

Supplies

900

To Cash

900

f

Supplies

1,300

To Accounts payable

1,300

No.

Account

Debit

Credit

a

Cash

4,540

To note payable

4,540

b.

Cash

5,230

To Common Stock

5,230

c.

Equipment

2,200

To Cash

   800

To Note payable

1,400

d.

Supplies

900

To Cash

900

f

Supplies

1,300

To Accounts payable

1,300

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