Journal Entries Practice Problems
The firm pays $28,000 to the suppliers in the question that bought equipment on account.
Debit - Accounts Payable (-l) 28,000 Credit - Cash (-a) 28,000
During 2017, paid suppliers of the merchandise inventory acquired previously above $290,000.
Debit - Accounts Payable (-l) 290,000 Credit - Cash (-a) 290,000
The firm issues $100,000 principal amount of bonds for $100,000 cash.
Debit - Cash (+a) 100,000 Credit - Bonds Payable (+l) 100,000
Borrowed $18,000 cash and signed a note due in two years.
Debit - Cash (+a) 18,000 Credit - Notes Payable (+l) 18,000
On January 1, 2017, issued 10,000 shares of $10 par value common stock for $18 cash.
Debit - Cash (+a) 180,000 Credit - Common Stock (+se) 100,000 Credit - Additional Paid In Capital (+se) 80,000
The firm issues 20,000 of shares of $10 par value common stock for $12 cash per share.
Debit - Cash (+a) 240,000 Credit - Common Stock (+se) 200,000 Credit - Additional Paid In Capital (+se) 40,000
During 2017, collections on accounts receivable amounted to $350,000.
Debit - Cash (+a) 350,000 Credit - Accounts Receivable (-a) 350,000
September 1: issues 4,000 shares of $10 par value common stock for $12 cash per share.
Debit - Cash (+a) 48,000 Credit - Common Stock (+se) 40,000 Credit - Additional Paid In Capital (+se) 8,000
On November 1, 2017, borrowed $50,000 from the bank for working capital for four months at 12% interest and executed a note payables. The principal plus all interest must be repaid on March 1, 2018. Record the loan as of November 2017.
Debit - Cash (+a) 50,000 Credit - Notes Payable (+l) 50,000
On November 1, 2017, received a $600 cash advance from a customer toward the purchase price of merchandise to be delivered during January 2018.
Debit - Cash (+a) 600 Credit - Unearned Revenue (+l) 600
Received $70,000 cash from the five investors who organized Nathanson Corporation. Each investor received 100 shares of $10 par value common stock.
Debit - Cash (+a) 70,000 Credit - Common Stock (+se) 5,00 Credit - Additional Paid In Capital (+se) 65,000
During 2017, sales to customers totaled $510,000, of which $80,000 was for cash and the balance on account.
Debit - Cash (+a) 80,000 Debit - Accounts Receivable (+a) 430,000 Credit - Sales Revenue 510,000
On December 1, 2017, signed a lease agreement to rent out excess space in its building on a temporary basis for a 3-month period priced at $300 per month. All $900 of rent was received in advance from the tenant.
Debit - Cash (+a) 900 Credit - Unearned Revenue (+l) 900
September 15: Receives a check for $900 from a customer as a deposit on a special order for equipment that Electronics plan to manufacture.
Debit - Cash (+a) 900 Credit - Unearned Revenue (+l) 900
The cost of merchandise sold to customers during 2017 was $240,000.
Debit - Cost of Goods Sold (+e) 240,000 Credit - Inventory (-a) 240,000
The Board of Directors of PCED declared dividends of $25,000 on December 31, 2017, payable on February 4, 2018. (2 WAYS)
Debit - Dividends 25,000 Credit - Dividends Payable 25,000 Debit - Retained Earnings (-se) 25,000 Credit - Dividends Payable (+l) 25,000
Purchased $11,000 in equipment, paying $1,500 in cash and signing a six-month note for the balance.
Debit - Equipment (+a) 11,000 Credit - Cash (-a) 1,500 Credit - Notes Payable (+l) 9,500
The firm acquires, on account, equipment costing $25,000 and merchandise inventory costing $12,000.
Debit - Equipment (+a) 25,000 Debit - Inventory (+a) 12,000 Credit - Accounts Payable (+l) 37,000
September 30: Purchases factory equipment costing $27,500. It issues a check for $5,000 and assumes a long-term mortgage liability for the balance.
Debit - Equipment (+a) 27,500 Credit - Cash (-a) 5,000 Credit - Notes Payable (+l) 22,500
September 20: Acquires office equipment with a list price of $950. It issues a check in full payment.
Debit - Equipment (+a) 950 Credit - Cash (-a) 950
Received and paid for $15,000 of store fixtures.
Debit - Fixtures (+a) 15,000 Credit - Cash (-a) 15,000
During 2017, acquired merchandise inventory on account totaling $320,000.
Debit - Inventory (+a) 320,000 Credit - Accounts Payable (+l) 320,000
September 12: Purchases raw materials on account for $6,100.
Debit - Inventory (+a) 6,100 Credit - Accounts Payable (+l) 6,100
On January 1, 2017, acquired land costing $25,000, a building costing $80,000, and equipment costing $40,000. PCEC paid cash.
Debit - Land (+a) 25,000 Debit - Building (+a) 80,000 Debit - Equipment (+a) 40,000 Credit - Cash (-a) 145,000
The firm acquires, with $220,000 in cash, land costing $40,000 and a building costing $180,000.
Debit - Land (+a) 40,000 Debit - Building (+a) 180,000 Credit - Cash (-a) 220,000
Lent $2,000 to an employee who signed a note to repay the loan in three months.
Debit - Notes Receivable (+a) 2,000 Credit - Cash (-a) 2,000
September 28: Issues a cash advance totaling $200 to three new employees who will begin work on October 1.
Debit - Notes Receivable (+a) 200 Credit - Cash (-a) 200
On January 1, purchased a two year insurance policy. PCEC paid the insurance premium of $24,000 for the two-year period (January 1, 2017 through December 31, 2018) in advance.
Debit - Prepaid Insurance (+a) 24,000 Credit - Cash (-a) 24,000
The firm signs an agreement to rent equipment from its owner and pays $1,500 rental in advance.
Debit - Prepaid Rent Expense (+a) 1,500 Credit - Cash (-a) 1,500
September 5: Pays $10,000 as two months' rent in advance on a factory building that is leased for the three years beginning October 1.
Debit - Prepaid Rent Expense (+a) 10,000 Credit - Cash (-a) 10,000
PCEC purchased $12,000 of supplies during 2017 and paid cash.
Debit - Supplies (+a) 12,000 Credit - Cash (-a) 12,000
During 2017, paid utility bills of $26,000 for utility services used in 2017.
Debit - Utilities Expense (+a) 26,000 Credit - Cash (-a) 26,000
During 2017, paid salaries to employees of $130,000 for work performed during 2017.
Debit - Wages Expense 130,000 Credit - Cash (-a) 130,000
Ordered store fixtures costing $15,000.
No transaction has occurred.
