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Homework answers / question archive / Ryan Terlecki organized a new Internet company, Cap Universe, Inc
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
| 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 |
