Question

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

a. Received $70,000 cash from the five investors who organized Jameson Corporation. Each investor received 100 shares of $10 par value common stock.
b. Ordered store fixtures costing $15,000.
c. Borrowed $18,000 cash and signed a note due in two years.
d. Purchased $11,000 of equipment, paying $1,500 in cash and signing a six-month note for the balance.
d. Lent $2,000 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

Answer:

Date General Journal Debit Credit

a. Cash $70,000

Common stock $5,000

(5*100 shares * $10)

Additional paid - in - capital $65,000

b. No journal entry required - -

c. Cash $18,000

Notes payable (long term) $18,000

d. Equipment $11,000

Cash $1,500

Notes payable (Short term) $9,500

e. Notes receivable $2,000

Cash $2,000

f. Store fixtures $15,000

Cash $15,000