Joel Henry founded Bookmart.com at the beginning of August, which sells new and

Question

Joel Henry founded Bookmart.com at the beginning of August, which sells new and used books online. He is passionate about books but does not have a lot of accounting experience a. The company purchased equipment for $4,300 cash. The equipment is expected to be used for 10 or more years b. Joel's business bought $7,300 worth of inventory from a publisher. The company will pay the publisher within 45-60 days c. Joel's friend Sam lent $4,300 to the business. Sam had Joel write a note promising that Bookmart.com would repay the $4,300 in four months. Because they are good friends, Sam is not going to charge Joel interest. d. The company paid $1,650 cash for books purchased on account earlier in the month. e. Bookmart.com repaid the $4,300 loan established in (c) Prepare journal entries for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 4 The company purchased equipment for $4,300 cash. The equipment is expected to be used for 10 or more years. Record the transaction Note: Enter debits before credits. Transaction General Journal Debit Credit

Explanation / Answer

Bookmart.com General journal Ref Account Title Debit Credit a Equipment 4300 Cash 4300 (Purchase of equipment for cash) b Inventory 7300 Accounts Payable 7300 (Purchase of inventory on account) c Cash 4300 Note payable 4300 (Cash lent by Sam on note ) d Accounts Payable 1650 Cash 1650 (Cash paid to supplier of books on account) e Note payable 4300 Cash 4300 (Payment for note payable)

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