Answer:
MeToo, Inc.
Journal Entries
Sr. No Accounts Dr. Cr.
May 1 Cash 17000
Common Stock 17000
Issued 850 shares of common stock to investors for $20 per share
May 15: Cash 46,500
Notes Payable 46,500
Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years.
May 31: Prepaid Insurance 4800
Cash 4800
Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance.
June 3: Furniture 22600
Accounts Payable 22600
Purchased furniture for the store for $22,600 on account. The amount is due within 30 days.
June 5: Advertisement 715
Cash 715
Placed advertisements in local college newspapers today for a total of $715 cash.
June 9: Cash 605
Services Revenue 605
Provided services for $605 cash.
June 14: Accounts Payable 22600
Cash 22600
Made full payment for the furniture purchased on account on June 3.
June 30 Insurance Expense 400
Prepaid Insurance 400
$ 4800/12 = $ 400 adjustment of one month insurance expense.