Question

Apple Inc, designs, manufactures, and markets mobile devices, personal computers, and portable digital music players and sells a variety of related software and services. Assume that the following transactions (in millions) occurred during the next fiscal year (ending on September 29, 2018):

a. Borrowed $50 from banks due in two years.
b. Purchased additional investments for $210 cash; one-fifth were long term and the rest were short term.
c. Purchased property, plant, and equipment; paid $12,600 in cash and signed a short-term note for 1,490 Issued additional shares of common stock for $835 in cash; total par value was $1 and the rest was in excess of par value.
d. Sold short-term investments costing $10,020 for $10,020 cash.
e. Declared $52 in dividends to be paid at the beginning of the next fiscal year.

Required:
Prepare a journal entry for each transaction.

Answer 1

Part a

Debit : Cash $50

Credit : Note Payable $50

Part b

Debit : Long - term Investments $42

Debit : Short - term Investments $168

Credit : Cash $210

Part c

Debit : Property, Plant and Equipment $14,090

Credit : Cash $12,600

Credit : Short term note payable $1,490

Part d

Debit : Cash $10,020

Credit : Short-term investments $10,020

Part e

Debit : Dividends $52

Credit : Shareholders for Dividends $52

Step-by-step explanation:

The first step is to identify the accounts affected by the transaction (usually 2 or more) then prepare journal entries as above.