Question

The following are the transactions of Spotlighter, Inc., for the month of January.

Borrowed $4,790 from a local bank on a note due in six months.

Received $5,480 cash from investors and issued common stock to them.

Purchased $2,700 in equipment, paying $1,050 cash and promising the rest on a note due in one year.

Paid $1,150 cash for supplies.

Bought and received $1,550 of supplies on account.

Prepare journal entries for each transaction.

Answer 1

S. No.	Account Tittle	Debit	Credit
a.	Cash	$4,790.00
	Note Payable		$4,790.00
	To Record Borrowed Money
b.	Cash	$5,480.00
	Common Stock		$5,480.00
	TO Record Issuance of Common Stock
c.	Equipment	$2,700.00
	Cash		$1,050.00
	Note Payable		$1,650.00
	TO Record Equipment Purchase
d.	Account   Payable	$1,150.00
	Cash		$1,150.00
	To Record Payment made for Supplies
e.	Suplies	$1,550.00
	Cash		$1,550.00
	To Record Supplies Purchase on Account