Question

Kelsey Baker founded GolfDeals.com at the beginning of February. GolfDeals.com sells new and used golf eq online. The following events occurred in February. a. Borrowed $30,000 cash from a bank, signing a note due in three years. b. Received investment of cash by organizers and distributed to them 500 shares of $0.10 par value commons market price of $30 per share. c. Purchased a warehouse for $115,000, paying $23,000 in cash and signing a note payable for the balance on a mortgage. d. Purchased computer and office equipment for $20,000, paying $4,000 in cash and owing the rest on accounts to the manufacturers. e. Loaned $1,000 to an employee who signed a note due in three months. f. Paid $2,000 to the manufacturers in (d) above. g. Purchased short-term investments for $10,000 cash. Required: For each of the events (a) through (g), prepare journal entries, checking that debits equal credits.

Answer 1

Credit Debit $30000 a Particulars Cash Note payable $30000 b $15000 $50 Cash (500 shares * $30 per share) Common stock (500 shares * $0.10 per share) Paid-in Capital (500 shares * $29.90 per share) $14950 с $115000 Warehouse Cash Note Payable $23000 $92000 d $20000 Computer and Office Equipment Cash Account Payable $4000 $16000 $1000 Note receivable Cash $1000 f $2000 Account Payable Cash $2000 8 $10000 Short-term Investments Cash $10000