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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Cornerstone Exercise 2-24 Journalize Transactions

Four transactions that occurred during June are listed below.

  1. June 1: Issued common stock to several investors for $100,000.
  2. June 8: Purchased equipment for $16300 cash.
  3. June 15: Made cash sales of $23,200 to customers.
  4. June 29: Paid a $4,500 dividend to stockholders.

Required:

Prepare journal entries for the transactions.

To determine

Concept Introduction:

Journal in accounting: A journal is a detailed record showing the debit and credit effects of all financial transactions in order by date. Each transaction is recorded in the form of an entry known as journal entry which has an equal debit and credit account name, description and date of transaction.

Requirement 1:

To prepare journal entry for transaction on June 1 when common stock is issued for $100000.

Explanation

Theissue of common stock has increased the cash account for cash received. Since cash is an asset and assets have normal debit balance which means it increases with debits and decreases with credit, so Cash is debited here...

To determine

Concept Introduction:

Journal in accounting: A journal is a detailed record showing the debit and credit effects of all financial transactions in order by date. Each transaction is recorded in the form of an entry known as journal entry which has an equal debit and credit account name, description and date of transaction.

Requirement 2:

To prepare journal entry for transaction on June 8 when equipment is purchased for $16800 in cash.

To determine

Concept Introduction:

Journal in accounting: A journal is a detailed record showing the debit and credit effects of all financial transactions in order by date. Each transaction is recorded in the form of an entry known as journal entry which has an equal debit and credit account name, description and date of transaction.

Requirement 3:

To prepare journal entry for transaction on June 15 when cash sales of $23200 is made to customers.

To determine

Concept Introduction:

Journal in accounting: A journal is a detailed record showing the debit and credit effects of all financial transactions in order by date. Each transaction is recorded in the form of an entry known as journal entry which has an equal debit and credit account name, description and date of transaction.

Requirement 4:

To prepare journal entry for transaction on June 29 when dividend of $4500 is paid to stockholders.

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