Ryan Terlecki organized a new Internet company, CapUniverse, Inc. The company sp
ID: 2365818 • Letter: R
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 two weeks of operations. a. Issued 2,300 shares of stock to investors for cash at $20 per share. b. Borrowed $67,000 from the bank to provide additional funding to begin operations; the note is due in two years. c. Paid $1,300 for the current month's rent of a warehouse and another $1,300 for next month's rent. d. Paid $1,320 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 $3,400 cash and the rest on account. The amount is due within 30 days. f. Purchased for $3,600 cash The University of Florida, UCLA, Texas A&M;, and Michigan State University baseball caps as inventory to sell online. g. Placed advertisements on Google for a total of $340 cash. h. Sold caps totaling $2,400, half of which was charged on account. The cost of the caps sold was $1,600. i. 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.Explanation / Answer
a. Issued 2,300 shares of stock to investors for cash at $20 per share. Cash Dr 46000, Capital Stock Cr 23000, Securities Premium cr 46000 b. Borrowed $67,000 from the bank to provide additional funding to begin operations; the note is due in two years. Bank Dr 67000, Funded Loan from bank cr 67000 c. Paid $1,300 for the current month's rent of a warehouse and another $1,300 for next month's rent. Rent Dr 1300, Advance Rent dr 1300, Cash cr 2600 d. Paid $1,320 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense) Prepaid Expense 1320, Cash cr 1320 For rest of the answers please rate this as lifesaver & re-post the question. Thank u in advance. God bless u:) Please consider the time devoted to make this reply by rating this as lifesaver.
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