Explanation for the business event
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The following journal entries are from the books of Kara Elizabeth Company:
a. Buildings 90,000
Cash 35,000
Mortgage Payable 55,000
b. Cash 25,000
Capital Stock 25,000
c. Cash 40,000
Loan Payable 40,000
d. Salary Expense 12,000
Cash 12,000
e. Inventory 12,500
Accounts Payable 12,500
f. Accounts Receivable 84,000
Sales 84,000
Cost of Goods Sold 51,000
Inventory. 51,000
g. Cash 62,000
Accounts Receivable 62,000
h. Accounts Payable 38,000
Cash 38,000
For each of the journal entries, prepare an explanation of the business event that is being represented.
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Solution Summary
The solution explains the business event which would have given rise to the given journal entry.
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a. Buildings 90,000
Cash 35,000
Mortgage Payable 55,000
This implies, that a building is purchased for $90,000. It is paid for by cash of $55,000 and a mortgage is taken for the balance amount of $55,000
b. Cash 25,000
Capital Stock 25,000 ...
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