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M Question 1- Ch 2 #1 - Connect
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Prepare journal entries to record each of the transactions and events listed above.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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The following transactions occurred during the month of June 2024 for the Stridewell Corporation. The company owns and operates a
retail shoe store.
1. Issued 70,000 shares of common stock in exchange for $350,000 cash.
2. Purchased office equipment at a cost of $65,000. Cash of $26,000 was paid and a note payable was signed for the balance owed.
3. Purchased.inventory on account at a cost of $140,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $238,000. The cost of the goods sold was $119,000.
5. Paid $3,000 in rent on the store building for the month of June.
6. Paid $1,680 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2024.
7. Paid $101,150 on account for the inventory purchased in transaction 3.
8. Collected $47,600 from customers on account.
9. Paid shareholders a cash dividend of $3,500.
10. Received cash of $1,300 from customers in advance of services to be provided.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
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