Question

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.)

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