Question

Ryan Terlecki organized a new Internet company, CapUniverse, Inc. The company specializes in baseball-type caps with logos printed on them. Ryan, who is never without a cap, believes that his target market is college and high school students. You have been hired to record the transactions occurring in the first month of operations. a. Issued 2,400 shares of $0.01 par value common stock to investors for cash at $24 per share. b. Borrowed $62.000 from the bank to provide additional funding to begin operations, the note is due in two years. c. Paid $2,200 cash for rent of a warehouse: $1,100 for the current month's rent and another $1,100 for next month's rent. d. Paid $1,560 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense) e. Purchased furniture and fixtures for the warehouse for $13,000, paying $2,200 cash and the rest on account. The amount is due within 30 days. f. Purchased for $3,400 cash The University of Pennsylvania, Notre Dame, The University of Texas at Austin, The Ohio State University, and Michigan State University baseball caps as inventory to sell online. 9. Placed advertisements on Google for a total of $310 cash; the ads were run immediately h. Sold caps totaling $1,700, half of which was charged on account. The cost of the caps sold was $900. (Hint: Make two entries.) 1. Made full payment for the furniture and fixtures purchased on account in (e). j. Received $250 from a customer on account. Required: Prepare journal entries for each transaction. Note that transaction () will require two entries, one for revenue and one for the related expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 11 > Teen anneharee ofen narvaline rammnn eru ta inuectnre far pacha < Prev 3 of 4 !!! Next >

Answer 1

Journal Entries:

	Account title and Explanation	Debit	Credit
a	Cash [2,400 x $24]	$57,600
	Common stock [2,400 x $0.01]		$24
	Paid in capital in excess of par - common stock		$1,382,400
	[To record issuance of common stock]
b	Cash	$62,000
	Notes payable		$62,000
	[To record borrowing from bank]
c	Rent expense	$1,100
	Prepaid rent	$1,100
	Cash		$2,200
	[To record payment of rent]
d	Prepaid insurance	$1,560
	Cash		$1,560
	[To record payment of insurance]
e	Furniture and Fixtures	$13,000
	Cash		$2,200
	Accounts payable		$10,800
	[To record purchase of furniture and fixtures]
f	Inventory	$3,400
	Cash		$3,400
	[To record purchase of inventory]
g	Advertising expense	$310
	Cash		$310
	[To record cash paid for advertisements]
h	Cash	$850
	Accounts receivable	$850
	Sales revenue		$1,700
	[To record sales]
	Cost of goods sold	$900
	Inventory		$900
	[To record cost of goods sold]
i	Accounts payable	$10,800
	Cash		$10,800
	[To record cash paid for accounts payable]
j	Cash	$250
	Accounts receivable		$250
	[To record collections from customers]