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PROBLEM 0 8 - ACCOUNTING CYCLE The Electronics Appliance Corporation was organized on September 1 The following transactions occurred during the month of September: (

PROBLEM 08- ACCOUNTING CYCLE
The Electronics Appliance Corporation was organized on September 1 The following
transactions occurred during the month of September:
(1) The firm issues 4/000 no-par-value common shares for $12 cash per share on
September 1
(2) The firm's lawyer is given 600 no-par-value common shares on September 2 in
payment for legal services rendered in the organization of the corporation. The bill
for the services is $7,200.
(3) A factory building is leased for the three years beginning October 1. Monthly rental
payments are $5,000. Two months' rent is paid in advance on September 5.
(4) Raw materials are purchased on account for $6,100 on September 12.
(5) A cheque for 5900 is received on September 15 from a customer as a deposit on a
special order for equipment that Electronics plans to manufacture. The contract price
is $4,800.
(6) Office equipment with a list price of $950 is acquired on September 20. After
deducting a discount of $25 for prompt payment, a cheque is issued in full payment.
(7) The company hires three employees to begin work on October 1. A cash advance of
$200 is given to one of the employees on September 28.
(8) Factory equipment costing $27,500 is purchased on September 30. A cheque for
$5,000 is issued, and a long-term mortgage liability is assumed for the balance.
(9) The labour costs of installing the new equipment in (8) are $450 and are paid in cash
on September 30.
Required:
a. Prepare journal entries for each of the nine transactions
b. Set up T accounts and post the journal entries
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