Grady Service Company Inc. was organized by Chris Grady and five other investors. The following events occurred during the year: a. Received $68,400 cash from the investors; each was issued 1,520 shares. b. Purchased equipment for use in the business at a cost of $18,400; one-fourth was paid in cash, and the company signed a note for the balance, payable in six months. c. Signed an agreement with a cleaning service to pay it $320 per week for cleaning the corporate offices. d. Lent $3,700 to one of the investors, who signed a note due in six months. e. Issued shares to additional investors, who contributed $7,200 in cash and a lot of land valued at $16,200. f. Paid the amount of the note payable in (b). g. Conor Mulkeen borrowed $11,200 for personal use from a local bank and signed a note payable in one year. Required: 1. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Post the above entries in the below T-accounts for the following accounts: cash, note receivable, equipment, land, note payable, and contributed capital. Beginning balances are zero. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts 3. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:
|
Grady Service Company Inc. was organized by Chris Grady and five other investors. The following events occurred during the year: |
| a. |
Received $68,400 cash from the investors; each was issued 1,520 shares. |
| b. |
Purchased equipment for use in the business at a cost of $18,400; one-fourth was paid in cash, and the company signed a note for the balance, payable in six months. |
| c. |
Signed an agreement with a cleaning service to pay it $320 per week for cleaning the corporate offices. |
| d. | Lent $3,700 to one of the investors, who signed a note due in six months. |
| e. |
Issued shares to additional investors, who contributed $7,200 in cash and a lot of land valued at $16,200. |
| f. | Paid the amount of the note payable in (b). |
| g. |
Conor Mulkeen borrowed $11,200 for personal use from a local bank and signed a note payable in one year. |
| Required: |
| 1. |
Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No |
| 2. |
|
| 3. |
Using the balances in the T-accounts, fill in the following amounts for the |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
