AT&T; LTE 1:12 PM Unit 2-Chapter 2 Assig The following are the transactions of S

Question

AT&T; LTE 1:12 PM Unit 2-Chapter 2 Assig The following are the transactions of Spotlighter, Inc., for the month of January Borrowed $4,540 from a local bank on a note due in six months Received $5,230 cash from investors and issued common stock to them. Purchased $2,200 in equipment, paying $800 cash and Paid $900 cash for supplies 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.) in the first account fieldolect No Journal Entry Book&Resources; eBook: Use journal entries and T-accounts to show how transactions affect the balance sheet

Explanation / Answer

The journal entries are given below for each transaction

Prepare the Journal Entry for borrowed from bank $4,540

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

Cash

4,540

         notes payable

4,540

( To cash taken from local bank on note payable due in six months debited to Cash and credited to notes payable account)

Prepare the Journal Entry for cash received from investors and issued common stock

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

Cash

5,230

         Common stock

5,230

( To cash received from investors debited to cash and credited to common stock account)

Prepare the Journal Entry for equipment purchases for $2,200

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

equipment

2,200

          Cash

800

         Notes payable

1.400

( To equipment purchased for $2200 debited to equipment a/c and credited to cash for$800 and balance to notes payable account due in one year)

Prepare the Journal Entry for cash paid on supplies

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

Supplies

900

         Cash

900

( To purchase of supplies on cash debited to supplies a/c and credited to cash account)

                    

Prepare the Journal Entry for purchase of supplies on account

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

Supplies

1,300

         Accounts payable

1,300

( To purchase of supplies on account debited to supplies a/c and credited to accounts payable account)

General Voucher

Date

Account title and Explanation

Post.

Ref.

Debit ($)

Credit ($)

January

Cash

4,540

         notes payable

4,540

( To cash taken from local bank on note payable due in six months debited to Cash and credited to notes payable account)

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