Question

The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company...

The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store.

  1. Issued 75,000 shares of common stock in exchange for $375,000 cash.
  2. Purchased office equipment at a cost of $68,750. $27,500 was paid in cash and a note payable was signed for the balance owed.
  3. Purchased inventory on account at a cost of $150,000. The company uses the perpetual inventory system.
  4. Credit sales for the month totaled $255,000. The cost of the goods sold was $127,500.
  5. Paid $3,250 in rent on the store building for the month of June.
  6. Paid $1,800 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021.
  7. Paid $108,375 on account for the merchandise purchased in 3.
  8. Collected $51,000 from customers on account.
  9. Paid shareholders a cash dividend of $3,750.
  10. Recorded depreciation expense of $1,375 for the month on the office equipment.
  11. Recorded the amount of prepaid insurance that expired for the month.


Required:
Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Homework Answers

Answer #1

Journal entry

No General Journal Debit Credit
1 Cash 375000
Common Stock 375000
2 Equipment 68750
Cash 27500
Notes payable 41250
3 Inventory 150000
Account payable 150000
4 Account receivable 255000
Sales revenue 255000
Cost of goods sold 127500
Inventory 127500
5 Rent expense 3250
Cash 3250
6 Prepaid insurance 1800
Cash 1800
7 Account payable 108375
Cash 108375
8 Cash 51000
Account receivable 51000
9 Cash dividend 3750
Cash 3750
10 Depreciation expense 1375
Accumulated Dep-equipment 1375
12 Insurance expense (1800/12) 150
Prepaid insurance 150
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