Question

Jameson Corporation was organized on May 1. The following events occurred during the first month.

A. Received $67,000 cash from the five investors who organized Jameson Corporation. Each investor received 110 shares of $10 par value common stock.
B. Ordered store fixtures costing $10,000.
C. Borrowed $16,000 cash and signed a note due in two years.
D. Purchased $18,000 of equipment, paying $1,400 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.

Answer 1

Transaction A

Debit : Cash $67,000

Credit : Common Stock $67,000

Transaction B

Debit : Store fixtures $10,000

Credit : Accounts payable $10,000

Transaction C

Debit : Cash $16,000

Credit : Note Payable $16,000

Transaction D

Debit : Equipment $18,000

Credit : Cash $1,400

Credit : Note Payable $16,600

Transaction E

Debit : Note Receivable $1,700

Credit : Cash $1,700

Transaction F

Debit : Accounts Payable $10,000

Credit : Cash $10,000

Step-by-step explanation:

When there is no immediate payment of cash recognize a liability accounts payable otherwise recognize cash.