E2-11 Recording Journal Entries LO2-4 Nathanson Corporation was organized on May

Question

E2-11 Recording Journal Entries LO2-4 Nathanson Corporation was organized on May 1, 2014. The following events occurred during the first month. a. Received $72,000 cash from the five investors who organized Nathanson Corporation. Each investor received 110 shares of $10 par value common stock b. Ordered store fixtures costing $17,000 c. Borrowed $19,000 cash and signed a note due in two years. d. Purchased $22,000 of equipment, paying $1,700 in cash and signing a six-month note for the balance. e. Lent $1,700 to an employee who signed a note to repay the loan in three months. f. Received and paid for the store fixtures ordered in (b). Required: 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

Nathanson Corporation

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No. Transaction General Journal Debit Credit 1 a. Cash 72000 Common stock (5 x 110 x $10) 5500 Additional paid-in capital 66500 (To record issue of common stock) 2 b. No journal entry required 3 c. Cash 19000 Notes payable (long-term) 19000 (To record amount borrowed against note) 4 d. Equipment 22000 Cash 1700 Notes payable (short-term) 20300 (To record equipment purchased) 5 e. Notes receivable 1700 Cash 1700 (To record loan to employee) 6 f. Store Fixtures 17000 Cash 17000 (To record store fixtures purchased)

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