Chapter 2, Problem 2.6E

Recording Investing and Financing Activities

Refer to E2-4.

Required:

For each of the events (a) through (e) in E2-4. prepare journal entries, checking that debits equal credits.

Determining Financial Statement Effects of Several Transactions

The following events occurred for Johnson Company:

1. a. Received investment of cash by organizers and distributed to them 1,000 shares of $1 par value common stock with a market price of $40 per share.
2. b. Purchased $ 15,000 of equipment, paying $3,000 in cash and owing the rest on accounts payable to the manufacturer.
3. c. Borrowed $10,000 cash from a bank.
4. d. Loaned $800 to an employee who signed a note.
5. e. Purchased $13,000 of land; paid $4,000 in cash and signed a mortgage note for the balance.