Question

The following transactions occurred during the month of June 2018 for the Stridewell Corporation. The company owns and operates a retail shoe store.

1. Issued 125,000 shares of common stock in exchange for $625,000 cash.
2. Purchased furniture and fixtures at a cost of $102,500. $41,000 was paid in cash and a note payable was signed for the balance owed.
3. Purchased inventory on account at a cost of $250,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $425,000. The cost of the goods sold was $212,500.
5. Paid $5,500 in rent on the store building for the month of June.
6. Paid $2,880 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2018.
7. Paid $180,625 on account for the merchandise purchased in 3.
8. Collected $85,000 from customers on account.
9. Paid shareholders a cash dividend of $6,250.
10. Recorded depreciation expense of $2,050 for the month on the furniture and fixtures.
11. Recorded the amount of prepaid insurance that expired for the month.

Required:
Prepare journal entries to record each of the transactions and events listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1