Journal entries
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Assume Down.com was organized on May 1, 2006 to compete with Despair.com?a company that sells de-motivational posters and office products. The following events occurred during the first month of Down.com's operations.
a. Received $60,000 cash from the investors who organized Down.com Corporation.
b. Borrowed $20,000 cash and signed a note due in two years.
c. Ordered lighting fixtures costing $16,000.
d. Purchased $10,000 in equipment, paying $1,000 in cash and signing a six-month note for the balance.
e. Received and paid for the lighting fixtures ordered in c.
Prepare journal entries for each transaction. Be sure to use good referencing and categorize each account as an asset (A), liability (L), or stockholders' equity (SE). If a transaction does not require a journal entry, explain the reason.
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Solution Summary
The solution explains the journal entries for the given transactions
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a. Received $60,000 cash from the investors who organized Down.com Corporation.
Cash (A) Dr 60,000
Common Stock (SE) Cr 60,000
b. Borrowed $20,000 cash and signed a ...
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