Use the horizontal model, or write the journal entry, for each of the following

Question

Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. A. Issued 220,000 shares of $6-par-value common stock for $1,320,000 in cash. B. Borrowed $540,000 from Oglesby National Bank and signed a 14% note due in two years. C. Incurred and paid $420,000 in salaries for the year. D. Purchased $710,000 of merchandise inventory on account during the year. E. Sold inventory costing $660,000 for a total of $990,000, all on credit. F. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. G. Purchased $140,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. H. Paid the entire $89,000 owed for store equipment and $620,000 of the amount due to suppliers for credit purchases previously recorded. I. Incurred and paid utilities expense of $43,000 during the year. J. Collected $825,000 in cash from customers during the year for credit sales previously recorded. K. At year-end, accrued $75,600 of interest on the note due to Oglesby National Bank. L. At year-end, accrued $20,000 of past-due December rent on the sales facilities. Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. A. Issued 220,000 shares of $6-par-value common stock for $1,320,000 in cash. B. Borrowed $540,000 from Oglesby National Bank and signed a 14% note due in two years. C. Incurred and paid $420,000 in salaries for the year. D. Purchased $710,000 of merchandise inventory on account during the year. E. Sold inventory costing $660,000 for a total of $990,000, all on credit. F. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. G. Purchased $140,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. H. Paid the entire $89,000 owed for store equipment and $620,000 of the amount due to suppliers for credit purchases previously recorded. I. Incurred and paid utilities expense of $43,000 during the year. J. Collected $825,000 in cash from customers during the year for credit sales previously recorded. K. At year-end, accrued $75,600 of interest on the note due to Oglesby National Bank. L. At year-end, accrued $20,000 of past-due December rent on the sales facilities. Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. A. Issued 220,000 shares of $6-par-value common stock for $1,320,000 in cash. B. Borrowed $540,000 from Oglesby National Bank and signed a 14% note due in two years. C. Incurred and paid $420,000 in salaries for the year. D. Purchased $710,000 of merchandise inventory on account during the year. E. Sold inventory costing $660,000 for a total of $990,000, all on credit. F. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. G. Purchased $140,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. H. Paid the entire $89,000 owed for store equipment and $620,000 of the amount due to suppliers for credit purchases previously recorded. I. Incurred and paid utilities expense of $43,000 during the year. J. Collected $825,000 in cash from customers during the year for credit sales previously recorded. K. At year-end, accrued $75,600 of interest on the note due to Oglesby National Bank. L. At year-end, accrued $20,000 of past-due December rent on the sales facilities.

Explanation / Answer

Journal Entries No Accounting titles & Explanations Debit Credit A Cash 1,320,000 common stock 1,320,000 B Cash 540,000 Notes payable 540,000 C Salary expense 420,000 cash 420,000 D Merchandise inventory 710,000 Accounts payable 710,000 E cost of goods sold 660,000 merchandise inventory 660,000 Accounts receivable 990,000 sales 990,000 F Prepaid rent 220,000 cash 220,000 G Store Equipment 140,000 cash 51,000 Accounts payable 89,000 H Accounts payable 709000 cash 709,000 I Utility expense 43,000 cash 43,000 J Cash 825,000 Accounts receivabe 825,000 K Interest expense 75,600 interest payable 75,600 L Rent expense 20,000 Prepaid rent 20,000

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