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.

Issued 55,000 shares of common stock in exchange for $275,000 cash.
Purchased office equipment at a cost of $53,750. $21,500 was paid in cash and a note payable was signed for the balance owed.
Purchased inventory on account at a cost of $110,000. The company uses the perpetual inventory system.
Credit sales for the month totaled $187,000. The cost of the goods sold was $93,500.
Paid $2,250 in rent on the store building for the month of June.
Paid $1,320 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021.
Paid $79,475 on account for the merchandise purchased in 3.
Collected $37,400 from customers on account.
Paid shareholders a cash dividend of $2,750.
Recorded depreciation expense of $1,075 for the month on the office equipment.
Recorded the amount of prepaid insurance that expired for the month.

Prepare journal entries to record each of the transactions and events listed above.

Homework Answers

Answer #1

Journal entries

No General Journal Debit Credit
a Cash 275000
Common Stock 275000
b Equipment 53750
Cash 21500
Notes payable 32250
c Inventory 110000
Account payable 110000
d Account receivable 187000
Sales revenue 187000
Cost of goods sold 93500
Inventory 93500
e Rent expense 2250
Cash 2250
f Prepaid insurance 1320
Cash 1320
g Account payable 79475
Cash 79475
h Cash 37400
Account receivable 37400
i Cash dividend 2750
Cash 2750
j Depreciation expense 1075
Accumulated depreciation-equipment 1075
k Insurance expense (1320/12) 110
Prepaid insurance 110
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