Complete journal entries for the transactions shown. 1. 1/2/16 issued 10,000 sha

Question

Complete journal entries for the transactions shown.

1. 1/2/16 issued 10,000 shares of stock to investors consisting of friends and family. Shares were sold at par value of $10 each.

2. 1/15/16 Received a loan of $300,000 from the bank.

3. 2/1/16 Puchased a building for office and retail space for $240,000. They paid 20% down in cash and signed a long-term mortgage note for the rest.

4. 2/1/16 Paid $1,200 in cash to purchase display equipment for the shoe showroom.

5. 2/1/16 The company purchased a six month insurance policy and paid cash in advance of $1,170.

6. 2/3/16 Purchased shoe inventory on account for $92,500.

7. 2/26/16 Recorded shoe sales to a local basketball team, sold on account for $3,900.

8. 3/1/16 Paid $60,000 of the Account Payable for the shoe inventory to the supplier.

9. 3/27/16 The company received a cash payment in full from the local basketball team.

10. 3/31/16 Shoe sales in cash for February and March were $36,700.

11. 3/31/16 Cost of Goods Sold for the February and March sales (cash and credit) were $22,330.

12. 3/31/16 Salaries and wages expense for February and March combined was $13,500. Of this total, $12,000 was paid in cash and $1,500 will be paid in April.

13. 3/31/16 The company records depreciation monthly. The building has a useful economic life of 40 years and the company uses the straight line depreciation method.

14. 3/31/16 The company records depreciation monthly. The display equipment has a useful economic life of 10 years and the company uses the straight line depreciation method.

15. 3/31/16 Insurance expense for Feb and March is 1/3 of the amount paid in advance.

Explanation / Answer

Date Accounts Titles and explanation Debit $ Credit $ 1/2/16 Cash 100000 Common Stock 100000 1/15/16 Cash 300000 Bank Loan 300000 2/1/16 Building - office 240000 Cash 48000 Note Payable 192000 2/1/16 Equipment 1200 Cash 1200 2/1/16 Advance Insurance 1170 Cash 1170 2/3/16 Inventory 92500 Accounts Payable 92500 2/26/16 Accounts Receivable 3900 Sales 3900 3/1/16 Accounts Payable 60000 Cash 60000 3/27/16 Cash 3900 Accounts Receivables 3900 31/3/16 Cash 36700 Sales 36700 3/31/16 Cost of Goods sold 22330 Finished Goods 22330 3/31/16 Salaries and Wages Expenses 13500 Cash 12000 Salaries and Wages Payable 1500 3/31/16 Depreciation 1200 Accumulated Depreciation - Office Building 1200 (240000 *2) /(40*12) = $1200 for Feb and mar'16 3/31/16 Depreciation 20 Accumulated Depreciation - Equipments 20 (1200 *2) /(10*12) = $20 for Feb and mar'16 3/31/16 Insurance Expense 390 Advance Insurance 390 (1170 * 2 /6) for Feb and Mar 16

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