Question

The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of common stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $60,000. $15,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $122,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $170,000. The cost of the goods sold was $102,000. 5. Paid $5,500 in rent on the warehouse building for the month of March. 6. Paid $6,550 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $102,000 on account for the merchandise purchased in 3. 8. Collected $76,500 from customers on account. 9. Recorded depreciation expense of $1,500 for the month on the equipment. Prepare journal entries to record each of the transactions listed above

Answer 1

Journal Entries:
S.no.	Accounts Title and explanations				Debit $	Credit $
1	Cash account				400000
	Common Stock capital					400000
2	Equipment Account				60000
	Cash account					15000
	Note payable					45000
3	Inventory account				122000
	Accounts payable					122000
4	Accounts receivabale				170000
	Sales revenue					170000
	Cost of goods sold				102000
	Inventory					102000
5	Rent expenses				5500
	Cash account					5500
6	Prepaid Insurance				6550
	Cash account					6550
7	Accounts Payable				102000
	Cash account					102000
8	Cash account				76500
	Accounts receivable					76500
9	Depreciation expenses				1500
	Accumulated depreciation					1500