Asked by Salvador Ramirez on Apr 28, 2024
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The ABC Corporation was formed on January 1,2019.The three initial owners each invested $100,000 cash and each received 10,000 shares of $1 par value common stock.Below are selected transactions that were completed during January,2019.
1.Issue shares of common stock to the owners.
2.Borrowed $80,000 on a one-year note payable.
3.Purchased land by signing a $70,000 note payable.
4.Paid $10,000 of accounts payable.
5.Purchased two service vehicles for cash at a cost of $24,000 each.
6.Purchased $2,000 of supplies on credit.
Prepare the journal entry on ABC's books for each transaction.Include a brief explanation for each entry.
Par Value
The face value of a bond or stock as stated by the issuing company, often used as an accounting standard or a minimum value.
Common Stock
A type of equity ownership in a corporation, representing a claim on part of the company's earnings and assets, with voting rights on corporate matters.
Journal Entry
A record in accounting that represents a transaction in the ledgers.
- Attain expertise in the formulation of journal entries corresponding to diverse transactions.
- Compute the values of common stock and additional paid-in capital derived from initial investments.
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Learning Objectives
- Attain expertise in the formulation of journal entries corresponding to diverse transactions.
- Compute the values of common stock and additional paid-in capital derived from initial investments.
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