Joe bilk Slink open oil Blink Corporations Merchandising business on Oct 1. Biln

Question

Joe bilk Slink open oil Blink Corporations Merchandising business on Oct 1. Bilnk inventory system. Blink provides a 2-year warranty with one ol Its products which was first sold in October Prepare journal entries to record the following merchandising transactions Oct. I. Issued 412.000 shares of $6 par value common stock for $}6 per share. Paid three months' rent on a lease rental contract. $5,800. Issued 12,000 shares $6 par value of common stock to attorneys In payment of their bill of $80,000 for services rendered in helping the company organize. Purchased office equipment on account from Office Station Co. $2,600. Purchases an asset today in exchange for a $100,000 zero-interest-bearing note payable four years from now. The company would record the asset at the present value of the $100.000 note establishes the exchange price of the transaction (the purchase price of the asset). Assuming the present value is $95,816. Purchased merchandise form Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated Oct 1. Sold merchandise that cost $800 to Rivera Co. for $1,500 under credit terms of 2/10, n/60 FOB shipping point. Invoice dated Oct 1. Accepted a donation of land with a fair value of $280,000 from the Memphis Industrial Development Corp Paid $425 cash for freight charges on the purchase of Oct 1. Accept a 60-day, 10% note to replace its existing $1,500 account receivable to Rivera Co on October 1.

Explanation / Answer

Date Account Titles & Explanations Debit Credit cash 14832000 common stock, $6 par value 2472000 paid-in-capital in excess of par-common stock 12360000 prepaid rent 5800 cash 5800 organization expense 80000 common stock, $6 par value 72000 paid-in-capital in excess of par-common stock 8000 office equiment 2600 accounts payable 2600 equipment 95816 discount on notes payable 4184 notes payable 100000 equipment (for new) 19000 accumulated deoreciation-equipment 4000 equipment (for old) 12000 cash 11000 merchandise inventory 6000 accounts payable 6000 accounts receivable 1500 sales 1500 cost of goods sold 800 merchandise inventory 800 cash 71776 premium on notes payable 1776 notes payable 70000 land 280000 contribution revenue 280000 freight in 425 cash 425 notes receivable 1500 accounts receivable 1500 petty cash 700 cash 700

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