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13 October, 20:31

Nike Inc is one of the world leading atheletic shoes manufacturer. The following activities occurs during the recent year: Purchased additional buildings for $176 and equipment for $270; paid $408 in cash and signed a long-term note for the rest. Issued 120 shares of $2 par value common stock for $345 cash. Declared $145 in dividends to be paid in the following year. Purchased additional short-term investments for $7,616 cash. Several Cannon Sporting Goods investors sold their own stock to other investors on the stock exchange for $86. Sold $4,413 in short-term investments for $4,413 in cash. Prepare journal entries.

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  1. 13 October, 20:42
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    The journal entries are shown below:

    1. Building A/c Dr $176

    Equipment A/c Dr $270

    To Cash A/c $408

    To Note payable A/c $38

    (Being the building and the equipment is purchased for cash and note payable)

    2. Cash A/c Dr $345

    To Common stock $240 (120 shares * $2)

    To Additional paid in capital A/c - Common stock A/c $105

    (Being the common stock is issued for cash)

    3. Retained earnings A/c Dr $145

    To Dividend payable A/c $145

    (Being the dividend is declared)

    4. Short - term investment A/c Dr $7,616

    To Cash A/c $7,616

    (Being the short term investment is purchased for cash)

    5. No journal entry is required

    6. Cash A/c Dr $4,413

    To Short - term investment A/c $4,413

    (Being the short-term investment is purchased)
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