Q3. Prepare the journal entries for each of Dennen, Inc.s transactions.

a. Borrowed $30,000 from a local bank.

b. Lent $10,000 to an affiliate; accepted a note due in one year.

c. Sold to investors 100 shares of common stock with a par value of $0.10 per share and a

market price of $5 per share; received cash.

d. Purchased $15,000 of equipment, paying $5,000 cash and signing a note for the rest, due

in one year.

e. Declared and paid $2,000 in dividends to stockholders.

Journal entries. 2 points. Each JE is 0.5 point. Debit Credit

a. Dr. Cash (+A) 30,000

Cr. Notes Payable (+L) 30,000

b. Dr. Notes Receivable (+A) 10,000

Cr. Cash (-A) 10,000

c. Dr. Cash (+A) 500

Cr. Common Stock (+SE)

Cr. Additional PaidIn Capital (+SE)

10

490

d. Dr. Equipment (+A) 15,000

Cr. Cash (-A) 5,000

Cr. Notes Payable (+L) 10,000

e. Dr. Retained Earnings (-SE) 2,000

Cr. Cash (-A) 2,000