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11 March, 00:52

Question:

The following events occurred for Johnson Company:

Received investment of cash by organizers and distributed to them 1,000 shares of $1 par value common stock with a market price of $40 per share

Purchased $15,000 of equipment, paying $3,000 in cash and owing the rest on accounts payable to the manufacturer

Borrowed $10,000 cash from a bank

Loaned $800 to an employee who signed a note.

Purchased $13,000 of land paid $4,000 in cash and signed a mortgage note for the balance

Required:

Prepare journal entries for the above transactions. (If no entry is required for a transaction/event, write 'No entry required.')

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Answers (1)
  1. 11 March, 01:15
    0
    Received investment of cash by organizers and distributed to them 1,000 shares of $1 par value common stock with a market price of $40 per share

    Dr. Cr.

    Cash $40,000

    Common stock @ 1 $1,000

    Add-In capital Common Stock $39,000

    Purchased $15,000 of equipment, paying $3,000 in cash and owing the rest on accounts payable to the manufacturer

    Dr. Cr.

    Equipment $15,000

    Cash $3,000

    Account Payable $12,000

    Borrowed $10,000 cash from a bank

    Dr. Cr.

    Cash $10,000

    Bank Loan $10,000

    Loaned $800 to an employee who signed a note.

    Dr. Cr.

    Note Receivable $800

    Cash $800

    Purchased $13,000 of land paid $4,000 in cash and signed a mortgage note for the balance

    Dr. Cr.

    Land $13,000

    Cash $4,000

    Mortgage Note Payable $9,000
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