Question

Transactions for Sheridan Company for the month of May are presented below. Prepare journal entries for each of these transactions.

May 1 Stockholders invests $4,350 cash in exchange for common stock in a small welding corporation.
3 Buys equipment on account for $1,055. 13Pays $394 to landlord for May rent.
21 Bills Noble Corp. $530 for welding work done. (Use Service Revenue account.)

Answer 1

May 1

Cash $4,350 (debit)

Common Stock $4,350(credit)

May 3

Equipment $1,055 (debit)

Accounts Payable $1,055 (credit)

May 13

Rent Expense $394 (debit)

Cash $394 (credit)

May 21

Accounts Receivable : Noble Corp $530 (debit)

Service Revenue $530 (credit)

Step-by-step explanation:

Note that, When stockholders invest cash in exchange of common stock, we recognize the increase in assets of cash and also the increase in equity item common stocks.