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Edward Allen Interiors Inc. is a leading manufacturer and retailer of home furnishings in the United States and abroad. The following is adapted from Edward Allen’s September 30, 2016, trial balance. (The amounts shown represent millions of dollars.)

Accounts Payable	$	148
Accounts Receivable		21
Cash		122
Common Stock		37
Equipment		330
Inventory		158
Notes Payable (long-term)		190
Notes Payable (short-term)		1
Prepaid Rent		39
Retained Earnings		353
Salaries and Wages Payable		31
Software		90

Assume that the following events occurred in the following quarter.

1. Paid $25 cash for additional inventory.
2. Issued additional shares of common stock for $20 in cash.
3. Purchased equipment for $200; paid $95 in cash and signed a note to pay the remaining $105 in two years.
4. Signed a short-term note to borrow $12 cash.
5. Conducted negotiations to purchase a sawmill, which is expected to cost $44.

4-Summarize the journal entry effects from part 3 using T-accounts. Use the September 30, 2016, ending balances as the beginning balances for the October–December 2016 quarter. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answer 1