Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 Paid $1,320 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense). Note: Enter debits before credits. Transaction General Journal Debit Credit d. Record entry Clear entry View general journal Journal entry worksheet 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. Note: Enter debits before credits. Transaction General Journal Debit Credit e. Record entry Clear entry View general journal Journal entry worksheet

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Power Of Accounting What The Numbers Mean And How To Use Them

Authors: Lawrence Lewis

1st Edition

0415884306, 978-0415884303

More Books

Students also viewed these Accounting questions

Question

For what reasons do home countries intervene in FDI?

Answered: 1 week ago