Happy Corporation was formed on August 1, 2017. Record the transactions and adju

Question

Happy Corporation was formed on August 1, 2017. Record the transactions and adjustments listed below referencing each transaction with the corresponding transaction number. Transactions: (1) August 1 - Sold 50,000 shares of common stock ($2 par value) for $12,000. (2) August 1 - Paid $2,100 for 3 months rent for lease starting on August 1. All rent is adjusted to expense at the end of the month. (3) August 1 - Purchased equipment for $18,000. $4,000 was paid in cash and the remainder was borrowed on a 9% note payable. Interest is paid annually on August 1. (4) August 5 - purchased $2,500 of supplies on account. Adjustments: (5) Monthly depreciation expense is $300. (6) Supplies on hand based on a physical count is $800. (7) Record monthly rent expense. (8) Accrue monthly interest.

Explanation / Answer

Note- I'm assuming you mean 5000 shares.

Or maybe 50,000 shares sold for 120,000. I don't know which one is the actual question, so I'm recording the entry for one. You can change the figures to the correct one.  

Q Date Particulars Debit Credit 1 Aug 1 Dr: Cash 12,000 Cr: Common Stock 10,000 Cr: Stock premium 2,000 2 Aug 1 Dr: Rent advance 2100 Cr: Cash 2100 3 Aug 1 '17 Dr: Equipment 18000 Cr: Cash 4000 Cr: 9% Note payable 14000 4 Aug 5 Dr: Supplies 2500 Cr: Trade payables 2500 5 Aug 31, Sept 30, Dr: Depreciation 300 Oct 31, Nov 30, Dec 31 Cr: Equipment 300 6 31st Dec Dr: Supply expense 1700 Cr: Supplies 1700

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