Question

Journalizing

Please create the necessary journal entries to reflect the following transactions for company ABC

1. Purchased $3,000 worth of supplies on account
2. Paid employee salaries of $22,000
3. Repaid $10,000 of principal of an outstanding note payable
4. Received $800 of outstanding receivables
5. Paid a dividend of $1,000
6. Sold 400 shares of common stock for $5 per share
7. Sold $8,000 of merchandise for cash. The original cost of the inventory sold was $2,500
8. Recorded depreciation of $1,500 on existing fixed assets
1. Purchased $150,000 of new equipment. 20% was paid in cash and the rest was on account
10. Paid $1,200 cash for a 12-month workers compensation insurance policy
11. ABC company recognizes that $1,100 in inventory has been damaged and is now worth only $200
12. Lent $5,000 to a supplier

Answer 1

Journal Entries
ABC COMPANY
Date	Account Title and Explanation	Debit	Credit
a.	Supplies	$       3,000
	Account Payable		$      3,000
	Being Supplies purchased on account
b	Salaries Expense	$     22,000
	Cash		$     22,000
	Being Salaries paid
c.	Note Payable	$     10,000
	Cash		$     10,000
	Being Note Paid
d.	Cash	$         800
	Account Receivable		$         800
	Being cash received from AR
e.	Dividend	$       1,000
	Cash		$      1,000
	Being Dividend paid
f.	Cash	$       2,000
	Common Stock		$      2,000
	Being 400 shares issued at $5 par vale
g.	Cash	$       8,000
	Sales		$      8,000
	Being merchandising sold
	Cost of Goods Sold	$       2,500
	Inventory		$      2,500
	being Cost of goods sold recorded
h.	Depreciation Expense	$       1,500
	Accumulated Depreciation		$      1,500
	Being depreciation expense recorded
i	Equipment	$   150,000
	Cash		$     30,000
	Account Payable		$   120,000
	Being equipment purchased
j.	Prepaid Insurance	$          1,200
	Cash		$         1,200
	Being insurance premium paid
k.	Cost of Goods Sold	$             900
	Inventory		$             900
	Loss due to damage recorded
l.	Advance to Supplier	$          5,000
	Cash		$         5,000
	Being cash lent to supplier