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General Journal Entries for Tiffany's Orthopedic Clinic

Record these transactions into a general journal form for Tiffany's orthopedic clinic.

Could you please give a brief explanation of the transaction as part of each journal entry?

oct.1: the clinic issued 4,000 additional shares of capital stock to doctor soges at $50 per share.

oct.4: the clinic purchased diagnostic equipment. the equipment cost $75,000, of which $25,000 was paid in cash;a note payable was issued for the balance.

oct. 12: issued a check for $9,000 in full payment of an account payable to zeller laboratories.

oct. 19: purchases surgical supplies for $2,600. payment is not due until nov. 28th.

oct. 25: collected a $24,000 account receivalbe from health one insurance company.

oct. 30: declared and paid a $300,000 cash dividend to stockholders.

Solution Preview

Oct 1
Debit cash $200,000
Credit common stock $200,000
To record the sale of 4000 shares of stock to Dr Soges at $50 per share. Comment: we don't know if part should be capital and part additional paid in capital, but it is all equity.

Oct 4
Debit equipment $75,000
Credit cash $25,000
Credit note payable $50,000
To record the purchase of diagnostic equipment with a total cost of $75,000 including a note payable of $50,000 ...

Solution Summary

The entries are presented together with explanations

$2.19