Question

he following are the transactions of Spotlighter, Inc., for the month of January: a. Borrowed $4,940 from a local bank on a note due in six months. b. Received $5,630 cash from investors and issued common stock to them. c. Purchased $3,000 in equipment, paying $1,200 cash and promising the rest on a note due in one year. d. Paid $1,300 cash for supplies. e. Bought and received $1,700 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.)

Answer 1

The journal entries for the transactions of Spotlighter, Inc. are as follows: a. Borrowed $4,940 from a local bank on a note due in six months: Debit Cash, Credit Notes Payable. b. Received $5,630 cash from investors and issued common stock to them: Debit Cash, Credit Common Stock. c. Purchased $3,000 in equipment, paying $1,200 cash and promising the rest on a note due in one year: Debit Equipment, Credit Cash, Credit Notes Payable. d. Paid $1,300 cash for supplies: Debit Supplies, Credit Cash. e. Bought and received $1,700 of supplies on account: Debit Supplies, Credit Accounts Payable.

Step-by-step explanation:

In order to prepare the journal entries for the transactions of Spotlighter, Inc., we need to analyze each transaction and determine the accounts that are affected. Here are the journal entries for each transaction:

a. Borrowed $4,940 from a local bank on a note due in six months:

• Debit: Cash ($4,940)
• Credit: Notes Payable ($4,940)

b. Received $5,630 cash from investors and issued common stock to them:

• Debit: Cash ($5,630)
• Credit: Common Stock ($5,630)

c. Purchased $3,000 in equipment, paying $1,200 cash and promising the rest on a note due in one year:

• Debit: Equipment ($3,000)
• Credit: Cash ($1,200)
• Credit: Notes Payable ($1,800)

d. Paid $1,300 cash for supplies:

• Debit: Supplies ($1,300)
• Credit: Cash ($1,300)

e. Bought and received $1,700 of supplies on account:

• Debit: Supplies ($1,700)
• Credit: Accounts Payable ($1,700)

Answer 2

a.

(A) Cash +4,940

(L) Notes payable (short-term) +4,940

b.

(A) Cash +5,630

(S) Common Stock +5,630

c.

(A) Cash -1,200

(A) Equipment +3,000

(L) Notes payable (short-term) +1,800

d.

(A) Cash -1,300

(A) Supplies +1,300

e.

(A) Supplies +1,700

(L) Accounts payable +1,700

Step-by-step explanation:

(A) = Assets

(L) = Liabilities

(S) = Stockholders' Equity

(A) = (L) + (S)

Transaction a.

(A) Cash +4,940

(L) Notes payable (short-term) +4,940

Transaction b.

(A) Cash +5,630

(S) Common Stock +5,630

Transaction c.

(A) Cash -1,200

(A) Equipment +3,000

(L) Notes payable (short-term) +1,800

Transaction d.

(A) Cash -1,300

(A) Supplies +1,300

Transaction e.

(A) Supplies +1,700

(L) Accounts payable +1,700

Hope this hepls!