Question

. Prepare journal entries to record the following transactions of Daisy King Ice Cream Company. If an entry is not required, state "No Entry." (2 pts each)
I. Started business by issuing 15,000 shares of capital stock for $2.50 per share.

2. Purchased equipment for $10,500, paying $3,000 down and signing a two-year, 8% note for the balance.

3. Paid weekly wages, $2,650.

4. Recorded depreciation on equipment, $685.

5. Signed a franchise agreement to pay franchise fees of 2% of sales.

6. Purchased $1,200 of supplies on account.

7. Recorded sales on account of $6,200 for the first month.

8. Paid franchise fees due on first month's sales.

9. Purchased a three-year insurance policy of $7,200 and paid six months' in advance.

10. Paid for supplies previously purchased on account.

Answer 1

Transaction	General Journal	Debit	Credit
1	Cash	$37,500
	Common Stock		$37,500
	(15,000 x $2.50)
2	Equipment	$10,500
	Cash		$3,000
	Notes Payable		$7,500
3	Salary and Wages Expense	$2,650
	Cash		$2,650
4	Depreciation	$685
	Accumulated Depreciation		$685
5	No Entry	-
	No Entry		-
6	Supplies	$1,200
	Accounts Payable		$1,200
7	Accounts Receivable	$6,200
	Sales Revenue		$6,200
8	Franchise fees	$124
	Cash		$124
	($6,200 x 2%)
9	Prepaid Insurance	$1,200
	Cash		$1,200
	($7,200 x 6/36)
10	Accounts Payable	$1,200
	Cash		$1,200