Question

RECORD IN JOURNAL ENTRY FORM

1. Record the journal entry for paying off a supplier invoice of $10,000 for raw materials on September 28th:

2. Record the journal entry for receive cash from a new shareholder who gave your company $300,000 in exchange for 3,000 shares of common stock, where the current market price is $100 per share.

3. Your company wants to expand your company to Seattle and lease office space downtown. You find an office building where you want your office to be for new employees, the landlord makes you pay 1 year of rent in advance for discount pricing at total cost of $225,000 for the year. Record the journal entry on day 1 when you sign the lease on 1st of October and pay in cash for the new office in Seattle:

Answer 1

• All working forms part of the answer
• Journal Entries are provided on the basis of information and data provided:
• Transaction 1 (Two scenarios)

--If invoice is paid on the same data material is purchased:

Date	Accounts title	Debit	Credit
28-Sep	Purchase [Raw Material]	$                                   10,000.00
	Cash		$                  10,000.00
	(Invoice paid in cash) [Assumed that Cash is paid on the same day when material is purchased and invoice is received]

--If invoice is purchased after the date on which material purchased is received:

Date	Accounts title	Debit	Credit
	Accounts Payable	$                                   10,000.00
	Cash		$                  10,000.00
	(Cash paid for invoice received earlier)

• Transaction 2 ( par Value Unknown – Assumed to be Equal to Market Value)

Date	Accounts title	Debit	Credit
Transaction 2	Cash [Cash is received]	$                                 300,000.00
	Common Stock		$                300,000.00
	(Common Stock issued)

• Transaction 3

Date	Accounts title	Debit	Credit
01-Oct	Prepaid Rent	$                                 225,000.00
	Cash		$                225,000.00
	(1 year Rent, paid in Advance)

---Later on, as the Rent period expires, Rent Expense will be debited and Prepaid Rent will be credited.