Reference no: EM132970575
For each of the following transactions, state the journal entry to be posted on the transaction date:
Example: On Oct. 11, the company acquired a warehouse for $75,000 paying 15% in cash, with the remaining 85% financed through a bank mortgage payable in 10 years.
Debit: Warehouse $75,000
Credit: Cash $11,250
Credit: Mortgage $63,750
a. On Feb. 1, the company issued 2,000 new shares of stock with a Par Value of $1.00 each share. The shareholders bought the shares at the price of $ 8.00 each.
b. On March 14, a customer made a $750 Cash deposit for a merchandise that the company will not deliver until September.
c. On April 1, the company acquired a new delivery truck for $55,000, paying $5,000 in cash and the balance financed through a five-year vehicle loan.
d. On May 10, $2,500 in new supplies were bought on credit.
e. On July 4, an older delivery truck with an Original Book value of $40,000 and an Accumulated Depreciation of $36,000 was sold to a used car dealership for $5,000.
f. On Aug. 31, the company incurred and paid $650 for various utilities.
g. In August 24, the company issued a Bond with Face Value of $100,000. The Bond matures in two years with a coupon rate of 5%, with interest payable twice a year. The Market rate at the time of issue was 6%. An investor quickly purchased the bond at the date of issue.
h. On Sept. 16, the company delivered the merchandise for which the customer made a Cash Deposit of $750 back on March 14.
i. On Sept. 30, the company wrote off $2,500 in Accounts Receivable that was over 100 days past due because customer has now declared bankruptcy. (The company currently has $52,000 in Accounts Receivable with a $6,000 Allowance for Bad Debts).
j. On Nov. 11, paid $1,500 for property insurance coverage that is to begin next year.
k. On Nov. 30 the company declared $20,000 in Cash Dividends to be paid and distributed equally among all the stockholders on July 1 of next year
l. On Dec. 31, the company posted an Adjusting entry to recognize the year-end Depreciation Expense for the $55,000 new delivery truck acquired on April 1. (The truck has a Residual Value of $5,000 and a useful life of 5 years. The company uses the Double Declining Balance Method to