Required : Several transactions occurred in March. Each is described separately

Question

Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.

Please do not combine steps or accounts!

(Options for Account portion:Cash, Accounts Recievable, Inventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable, Interest Payable, Wages Payable, Notes Payable, Paid-In Capital, Retained Earnings, Leave Blank)

Transaction 1
On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $21,000 in exchange for shares of stock. A few of their friends also purchased stock totaling $15,000 that was deposited in The Wire account.

Transaction 2
The company quickly acquired $43,000 in inventory, 30% of which was paid for in cash. The rest was acquired on open accounts that were payable after 30 days.

Transaction 3
A one-year store rental lease was signed on March 1 for $1,000 per month, and rent for the first 4 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Transaction 4
The owners paid $4,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $5,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Transaction 5
Sales were $76,000. Cost of merchandise sold was 50% of its sales price. 40% of the sales were for cash. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Transaction 6
Wages and salaries in March were $10,600, of which $8,000 was actually paid to employees.

Transaction 7
Miscellaneous expenses were $1,600, all paid for with cash.

Transaction 8
On March 1, fixtures and equipment were purchased for $4,500 with a downpayment of $1,000 and a $3,500 note, payable in one year. Interest of 5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 12 years with no expected salvage value. [Note: Record the complete entry for the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]

Transaction 9
Cash dividends totaling $3,600 were paid to stockholders on March 31.

(Options for Account portion:Cash, Accounts Recievable, Inventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable, Interest Payable, Wages Payable, Notes Payable, Paid-In Capital, Retained Earnings, Leave Blank)

UPDATE: I only need help with Transaction #3, Transaction #5 and Transaction #8.

Explanation / Answer

Solution:

From transaction no 8, Fixture and Equipment will be increased by $4,468.75 Cash will be decreased by $1,000, Notes payable will increased by $3,500, Interest Payable will be increased by $14.58 and retained earnings will decreased by $45.83

Transaction No Date Journal Entry Debit Credit 3 1-Mar Prepaid Rent A/c Dr $4,000.00          To Cash A/c $4,000.00 3 31-Mar Retained Earnings (Rent) Dr $1,000.00         To Prepaid Rent A/c $1,000.00 From transaction no 3, Prepaid rent will increase by $3,000, Cash A/c will decreased by $4,000 and Retained earnings will decrease by $1,000 5 Cash A/c Dr $30,400.00 Accounts Receivable Dr $45,600.00            To Retained Earnings (Sales) A/c $76,000.00 5 Retained Earnings (Cost of Goods Sold)A/c Dr $38,000.00         To inventory A/c $38,000.00 From transaction no 5, Cash will be increase by $30,400, Accounts receivable will increase by $45,600, Inventory will be decreased by $38,000 and retained earnings will increased by $38,000 8 1-Mar Fixture and Equipment A/c Dr $4,500.00            To Cash A/c $1,000.00            To Notes payable A/c $3,500.00 31-Mar Retained Earnings (Depreciation) A/c Dr $31.25             To Fixture and Equipment A/c $31.25 31-Mar Retained Earnings (Interest) A/c Dr $14.58               To Interest Payable A/c $14.58

From transaction no 8, Fixture and Equipment will be increased by $4,468.75 Cash will be decreased by $1,000, Notes payable will increased by $3,500, Interest Payable will be increased by $14.58 and retained earnings will decreased by $45.83

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