Ryan Terlecki organized a new Internet company, Cap Universe, Inc

Accounting Sep 19, 2020

Ryan Terlecki organized a new Internet company, Cap Universe, 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 month of operations. a. Issued 2,700 shares of $0.01 par value common stock to investors for cash at $27 per share. b. Borrowed $68,000 from the bank to provide additional funding to begin operations; the note is due in two years. c. Paid $2,600 cash for rent of a warehouse: $1,300 for the current month's rent 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 $14,000, paying $2,600 cash and the rest on account. The amount is due within 30 days. f. Purchased for $3,400 cash The University of Pennsylvania, Notre Dame, The University of Texas at Austin, The Ohio State University, and Michigan State University baseball caps as inventory to sell online. g. Placed advertisements on Google for a total of $320 cash; the ads were run immediately. h. Sold caps totaling $1,600, half of which was charged on account. The cost of the caps sold was $800. (Hint: Make two entries.) i. Made full payment for the furniture and fixtures purchased on account in (e). j. Received $230 from a customer on account.
Required: Prepare journal entries for each transaction. Note that transaction (h) will require two entries, one for revenue and one for the related expense. (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 1 2 3 4 5 6 7 8 ..... 11 > Issued 2,00 shares of $0.01 par value common stock to investors for cash at $27 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit
Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 11 Borrowed $68,000 from the bank to provide additional funding to begin operations; the note is due in two years. Note: Enter debits before credits. Transaction General Journal Debit Credit b. Record entry Clear entry View general journal
Journal entry worksheet

Expert Solution

Transaction	General Journal	Debit	Credit
a	Cash (2,700*$27)	$ 72,900
	Common stok (2,700*$0.01)		$ 27
	Paid in capital in excess of par		$ 72,873

b	Cash	$ 68,000
	Note payable		$ 68,000

c	Rent expenses	$ 1,300
	Prepaid rent	$ 1,300
	Cash		$ 2,600

d	Prepaid insurance	$ 1,320
	Cash		$ 1,320

e	Furniture and fixtures	$ 14,000
	Cash		$ 2,600
	Accounts payable		$ 11,400

f	Inventory	$ 3,400
	Cash		$ 3,400

g	Advertising expenses	$ 320
	Cash		$ 320

h	Cash	$ 800
	Accounts receivable	$ 800
	Sales revenue		$ 1,600

	Cost of goods sold	$ 800
	Inventory		$ 800

i	Accounts payable	$ 11,400
	Cash		$ 11,400

j	Cash	$ 230
	Accounts receivable		$ 230

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