Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year: Received $71,000 cash from the six investors; each investor was issued 8,500 shares of common stock with a par value of $0.20 per share. Signed a five-year lease for $151,500 for the right to use a building each year. Purchased equipment for use in the business at a cost of $19,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). Signed an agreement with a cleaning service to pay $130 per week for cleaning the corporate offices next year. Received an additional contribution from investors who provided $3,100 in cash and land valued at $16,000 in exchange for 1,100 shares of stock in the company. Lent $2,600 to one of the investors, who signed a note due in six months. Bennett Griffin borrowed $7,100 for personal use from a local bank, signing a one-year note. Required: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. Beginning Balance (c) Ending Balance Debit Beginning Balance (d) Ending Balance Ending Balance Debit Beginning Balance Equipment 0 Operating Lease Right-of-Use Assets Debit Credit 19,000 19,000 0 Long-term Lease Liabilities. Credit 151,500 (d) Credit 0 151,500 (b) Beginning Balance (e) Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Land 0 16,000 16,000 Notes Payable Common Stock 14,250 Credit 0 14,250 (c) Credit 10,420 Credit 0 10,200 (a) 220 (e)
Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year: Received $71,000 cash from the six investors; each investor was issued 8,500 shares of common stock with a par value of $0.20 per share. Signed a five-year lease for $151,500 for the right to use a building each year. Purchased equipment for use in the business at a cost of $19,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). Signed an agreement with a cleaning service to pay $130 per week for cleaning the corporate offices next year. Received an additional contribution from investors who provided $3,100 in cash and land valued at $16,000 in exchange for 1,100 shares of stock in the company. Lent $2,600 to one of the investors, who signed a note due in six months. Bennett Griffin borrowed $7,100 for personal use from a local bank, signing a one-year note. Required: 1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts. Beginning Balance (c) Ending Balance Debit Beginning Balance (d) Ending Balance Ending Balance Debit Beginning Balance Equipment 0 Operating Lease Right-of-Use Assets Debit Credit 19,000 19,000 0 Long-term Lease Liabilities. Credit 151,500 (d) Credit 0 151,500 (b) Beginning Balance (e) Ending Balance Debit Ending Balance Beginning Balance Debit Ending Balance Debit Beginning Balance Land 0 16,000 16,000 Notes Payable Common Stock 14,250 Credit 0 14,250 (c) Credit 10,420 Credit 0 10,200 (a) 220 (e)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year:
Received $71,000 cash from the six investors; each investor was issued 8,500 shares of common stock with a par value of $0.20 per share.
Signed a five-year lease for $151,500 for the right to use a building each year.
Purchased equipment for use in the business at a cost of $19,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
Signed an agreement with a cleaning service to pay $130 per week for cleaning the corporate offices next year.
Received an additional contribution from investors who provided $3,100 in cash and land valued at $16,000 in exchange for 1,100 shares of stock in the company.
Lent $2,600 to one of the investors, who signed a note due in six months.
Bennett Griffin borrowed $7,100 for personal use from a local bank, signing a one-year note.
Required:
1. For each of the preceding transactions, record the effects of the transaction in the appropriate T-accounts.
Beginning Balance
Ending Balance
Debit
Ending Balance
Beginning Balance
(d)
Ending Balance
Debit
Beginning Balance
Equipment
0
19,000
Operating Lease Right-of-Use Assets
Debit
Credit
19,000
0
Long-term Lease Liabilities
Credit
151,500
(d)
Credit
0
151,500 (b)
Beginning Balance
Ending Balance
Debit
Ending Balance
Beginning Balance
Debit
Ending Balance
Debit
Beginning Balance
Land
0
16,000
16,000
Notes Payable
Common Stock
14,250
Credit
0
14,250 (c)
Credit
10,420
Credit
0
10,200 (a)
220 (e)
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