Ask Question
11 September, 17:55

The following events occurred for Favata Company: Received $12,000 cash from owners and issued stock to them. Borrowed $9,000 cash from a bank and signed a note due later this year. Bought and received $1,000 of equipment on account. Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600. Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account. Required: For each of the events in above, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

+3
Answers (1)
  1. 11 September, 19:39
    0
    The journal entries is as follows:

    (1) Received $12,000 cash from owners and issued stock to them

    Cash A/C Dr. $12,000

    To Stock capital a/c $12,000

    (2) Borrowed $9,000 cash from a bank and signed a note due later this year.

    Cash a/c Dr. $9,000

    To Notes Payable (short term) $9,000

    (3) Bought and received $1,000 of equipment on account.

    Equipment a/c Dr. $1,000

    To Vendor's a/c $1,000

    (4) Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600.

    Land a/c Dr. $16,000

    To cash a/c $1,400

    To Note payable (long term) $14,600

    (5) Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account.

    Equipment a/c Dr. $5,000

    To cash a/c $1,400

    To Vendor's a/c $3,600
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The following events occurred for Favata Company: Received $12,000 cash from owners and issued stock to them. Borrowed $9,000 cash from a ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers