E2-6 (Static) Recording Investing and Financing Activities LO2-4

The following events occurred for Johnson Company:

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.
Purchased $15,000 of equipment, paying $3,000 in cash and owing the rest on accounts payable to the manufacturer.
Borrowed $10,000 cash from a bank.
Loaned $800 to an employee who signed a note.
Purchased $13,000 of land; paid $4,000 in cash and signed a note for the balance.

Required:

Prepare journal entries for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field

Expert Solution

Journal entry

No	General Journal	Debit	Credit
a	Cash	40000
	Common Stock		1000
	Paid in capital in excess of par-Common Stock		39000

b	Equipment	15000
	Cash		3000
	Account payable		12000

c	Cash	10000
	Bank loan		10000

d	Notes receivable	800
	Cash		800

e	Land	13000
	Cash		4000
	Notes payable		9000

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