Issued common stock at par for $23,700. Recorded depreciation on buildings for $16,900. Paid salaries of $6,400. Issued 1,300 shares of $1 par value common stock for equipment worth $8,000. Sold equipment (cost $11,800, accumulated depreciation $8,260) for $1,416. For each transaction above, prepare the journal entry.

Question

Jaelyn Lam

Business

1 May, 09:00

Issued common stock at par for $23,700. Recorded depreciation on buildings for $16,900. Paid salaries of $6,400. Issued 1,300 shares of $1 par value common stock for equipment worth $8,000. Sold equipment (cost $11,800, accumulated depreciation $8,260) for $1,416. For each transaction above, prepare the journal entry.

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Yosef Weiss · Answer 1

The journal entries are shown below:

1. Cash A/c Dr 23,700

To Common stock A/c 23,700

(Being the common stock is issued for cash)

2. Depreciation Expense A/c Dr $16,900

To Accumulated Depreciation - Buildings A/c $16,900

(Being depreciation expense is recorded)

3. Salaries expense A/c Dr $6,400

To Cash A/c $6,400

(Being the salaries expense is paid for cash)

4. Equipment A/c Dr $8,000

To Common stock A/c $1,300

To Additional paid-in capital in excess of par value A/c $6,700

(Being the equipment is purchased)

5. Cash A/c Dr $1,416

Accumulated depreciation - Equipment A/c Dr $8,260

Loss on sale of equipment A/c Dr $2,124

To Equipment A/c $11,800

(Being the equipment is sold)