The following transactions occurred during March 2018 for the Wainwright Corpora
ID: 2398550 • Letter: T
Question
The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of common stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $60,000. $15,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $122,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $170,000. The cost of the goods sold was $102,000. 5. Paid $5,500 in rent on the warehouse building for the month of March. 6. Paid $6,550 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $102,000 on account for the merchandise purchased in 3. 8. Collected $76,500 from customers on account. 9. Recorded depreciation expense of $1,500 for the month on the equipment. Prepare journal entries to record each of the transactions listed above
Explanation / Answer
Journal entry :explanation
debit
No. accounts debit credit 1 Cash 400000 Common Stock 400000 (To record issue common stock) 2 Equipment 60000 Cash 15000 Notes payable 45000 (To record purchase equipment) 3 Merchandise inventory 122000 Account payable 122000 (To record purchase inventory) 4 Account receivable 170000 Sales revenue 170000 (To record credit sales) Cost of goods sold 102000 Merchandise inventory 102000 (To record cost of goods sold) 5 Rent expense 5500 Cash 5500 (To record rent paid) 6 Prepaid insurance 6550 Cash 6550 (To record prepaid insurance paid) 7 Account payable 102000 Cash 102000 (To record amount paid) 8 Cash 76500 Account receivable 76500 (To record amount collected) 9 Depreciation expense 1500 Accumlated depreciation 1500 (To record depreciation expense)Related Questions
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