Three former college classmates have decided to pool a variety of work experienc
ID: 2487905 • Letter: T
Question
Three former college classmates have decided to pool a variety of work experiences by opening a store near campus to sell wireless equipment to students. The business has been incorporated as University Wireless. Several transactions occurred in March. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease. NOTE: the account options are cash, accounts receivable, inventory, prepaid rent, fixtures and equipment, accounts payable, interest payable, wages payable, notes payable, paid in capital, retained earnings, and leave blank.
Transaction 1 On March 1, each of three former classmates invested $12,000 in cash in exchange for 1,000 shares of stock each Account: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Dollar amount: Account: Account: Account: Account:Explanation / Answer
Journal Entry:-
1)Debit Cash (12,000*3) = 36,000
Credit Common Stock = 30,000
Credit Paid in Capital in excess of Par Value = 6,000
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2)Debit Inventory = 40,000
Credit Accounts Payable (40,000*70%) = 28,000
Credit Cash = 12,000
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3)Debit Rent = 550
Debit Prepaid Rent (550*2) = 1,100
Credit Cash = 1,650
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4)Debit Advertsising Expenses (7,000+4,000) = 11,000
Credit Cash = 7,000
Credit Accounts Payable for Expenses = 4,000
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5)Image not Clear - AMount cannot be seen
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6)Debit Wages & Salaries = 10,600
Credit Cash = 5,200
Credit Wages & Salaries Payable = 5,400
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7)Debit Miscellaneous Expenses = 1,000
Credit Cash = 1,000
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8)Debit Fixtures & Euipment = 4,000
Credit Cash = 1,000
Credit Note Payabe = 3,000
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Debit Interest on Note (3,000*6.5%/12) = 16.25
Credit Note Payable = 16.25
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Debit Depreciation = 400
Credit Fixtures and Equipment = 400
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9)Debit Retained Earnings= 4,200
Credit Dividend Payable to Common Stock Holders= 4,200
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Debit Dividend Payable to Common Stock Holders = 4200
Credit Cash = 4200