Question

The following are the transactions of Spotlighter, Inc., for the month of January. Borrowed $4,390 from a local bank on a note due in six months. Received $5,080 cash from investors and issued common stock to them. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year. Paid $750 cash for supplies. Bought and received $1,150 of supplies on account. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

the following will be the journal entries:

sno	account	deibt	credit
1.	Cash a/c	$4,390
	...............To Notes payable a/c		4,390
	(since cash received against note due in six months)
2.	Cash a/c	$5,080
	...............To Common stock a/c		5,080
3.	equipment	1,900
	..............To cash a/c		650
	...............To Notes payable	.	1,250
	(notes payable = equipment amount - cash paid => 1,900-650 =>1,250)
4.	Supplies a/c	750
	............To cash a/c		750
5	supplies a/c	1,150
	..............To accounts payable a/c		1,150