Question
The following transactions occurred at the Daisy King Ice Cream Company. Started business by issuing 10,000 shares of common stock for $37,000. Signed a franchise
The following transactions occurred at the Daisy King Ice Cream Company.
- Started business by issuing 10,000 shares of common stock for $37,000.
- Signed a franchise agreement to pay royalties of 5% of sales.
- Leased a building for three years at $670 per month and paid six months' rent in advance.
- Purchased equipment for $7,100, paying $4,000 down and signing a two-year, 8% note for the balance.
- Purchased $3,500 of supplies on account.
- Recorded cash sales of $2,500 for the first week.
- Paid weekly salaries and wages, $1,170.
- Paid for supplies purchased in item (5).
- Paid royalties due on first week's sales.
- Recorded depreciation on equipment, $100.
Required: Prepare journal entries to record each of the transactions listed above.
-
1
Started business by issuing 10,000 shares of common stock for $37,000.
-
2
Signed a franchise agreement to pay royalties of 5% of sales.
-
3
Leased a building for three years at $670 per month and paid six months' rent in advance.
-
4
Purchased equipment for $7,100, paying $4,000 down and signing a two-year, 8% note for the balance.
-
5
Purchased $3,500 of supplies on account.
-
6
Recorded cash sales of $2,500 for the first week.
-
7
Paid weekly salaries and wages, $1,170.
-
8
Paid for supplies purchased in item (5).
-
9
Paid royalties due on first week's sales.
-
10
Recorded depreciation on equipment, $100.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started