Question
Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year:
Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year:
a. Received $75,000 cash from the six investors; each investor was issued 8,900 shares of common stock with a par value of $0.10 per share.
b. Signed a five-year lease for $157,500 for the right to use a building each year.
c. Purchased equipment for use in the business at a cost of $23,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
d. Signed an agreement with a cleaning service to pay $170 per week for cleaning the corporate offices next year.
e. Received an additional contribution from investors who provided $3,500 in cash and land valued at $20,000 in exchange for 1,500 shares of stock in the company.
f. Lent $3,000 to one of the investors, who signed a note due in six months.
g. Bennett Griffin borrowed $7,500 for personal use from a local bank, signing a one-year note.
Kequired: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. \begin{tabular}{|l|l|l|l|} \hline & & & \\ \hline Ending Balance & 23,000 & & \\ \cline { 2 - 4 } & & \end{tabular}Step by Step Solution
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