Question

Journalize the following Lewis Hamilton began his business by contributing an iPad and Cash Register valued at $1,500 and video equipment valued at $6,200 and depositing $39375 in a checking account in the name of the corporation in exchange for 6,000 shares, $2 par value shares of capital stock.

Received $15,000 proceeds from an unsecured, 9%, 5 year, interest only bank loan, due August 1, 2018. The proceeds will be used to pay daily operation costs of the company. Interest will be paid monthly on the fifth of each month; next payment day is September 5th.

Purchased 30 shares of Netflix, Inc. common stock as an investment. (Find stock price as of August 1, 2018). Paid a commission price of $20.00/ transation. Use the Short-term Investment (Available For Sale) account.

Purchased 2 Virtual Reality Chairs for $22,400, paying $2,400 cash and the balance with a zero interest bearing 36 month note.

Paid cash for an exclusive 4 year right to sell racing gear products from Sparcoal Racing Company, $8,000.

Purchased 20 helmets (Model T200), on account, for resale purposes only. Helmets cost $75 each, $1,500.00. HPR was charged shipping costs of $25.00, which was also included in the amount owed—use the Merchandise Inventory Account, terms, 2%, n/30.

Answer 1

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Event	Date	Account	Debit	Credit
1		Office Equipment	$                     1,500
		Video Equipment	$                     6,200
		Cash	$                  39,275
		Common Stock (6000*2)		$         12,000
		Additional Paid in Capital-excess of par		$         34,975
2	Aug 1 2018	Cash	$                  15,000
		Short Term Note payable		$         15,000
3	Aug 1 2018	Investment - available for sale (30*338.38)	$                  10,151
		Commission Charges	$                           20
		Cash		$         10,171
4		Office Equipment	$                  22,400
		Cash		$           2,400
		Short Term Note payable		$         20,000
5		Right to sell	$                     8,000
		Cash		$           8,000
6		Merchandise Inventory	$                     1,525
		Cash		$           1,525