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Journal Entries - Burdette Construction Company

The following transactions are for the Burdette Construction Company:

a. The firm bought equipment for $49,000 on credit.
b. The firm purchased land for $500,000, $190,000 of which was paid in cash and a note payable signed for the balance.
c. The firm paid $33,000 it owed to its suppliers.
d. The firm arranged for a $125,000 line of credit (the right to borrow funds as needed) from the bank. No funds have yet been borrowed.
e. The firm sold some of its products for $29,000?$14,000 for cash, the remainder on account.
f. Cost of sales in (e) are $17,000.
g. The firm borrowed $78,000 on its line of credit
h. The firm issued a $7,500 cash dividend to its stockholders.
i. An investor invested an additional $50,000 in the company in exchange for additional capital stock.
j. One of the primary investors borrowed $75,000 from a bank. The loan is a personal loan.
k. The firm repaid $13,000 of its line of credit.
l. The firm received a $500 deposit from a customer for a product to be sold and delivered to that customer next month.

Analyze and record the transactions as journal entries.

Solution Preview

a. The firm bought equipment for $49,000 on credit.

Equipment Dr 49,000
Accounts Payable Cr 49,000

b. The firm purchased land for $500,000, $190,000 of which was paid in cash and a note payable signed for the balance.

Land Dr 500,000
Cash Cr 190,000
Notes Payable 310,000

c. The firm paid $33,000 it owed to its suppliers.

Accounts Payable 33,000
Cash Cr 33,000

d. The firm arranged for a $125,000 line of ...

Solution Summary

The solution explains the journal entries for the given transactions

$2.19