Question

Ryan Olson organized a new company, MeToo, Inc. The company provides networking management services on social network sites. You have been hired to record the following transactions.
a. May 1: Issued 1,050 shares of common stock to investors for $30 per share.
b. May 15: Borrowed $48,000 from the bank to provide additional funding to begin operations; the note is due in two years.
c. May 31: Paid $3,900 for a one-year fire insurance policy with coverage starting June 1.
TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance).
At the end of June, this account will be adjusted to its proper balance.
d. June 3: Purchased furniture for the store for $31,800 on account. The amount is due within 30 days.
e. June 5: Placed advertisements in local college newspapers today for a total of $260 cash.
f. June 9: Provided services for $685 cash.
g. June 14: Made full payment for the furniture purchased on account on June 3.

Answer 1

Answer:

Ryan Olson

General Journal

a.

Cash $31,500 (debit)

Common Stock $31,500 (credit)

Received Cash in Exchange of Common Stock

b.

Cash $48,000 (debit)

Note Payable $48,000 (credit)

Received Cash from Bank Loan

c.

Prepaid Insurance $3,900 (debit)

Cash $3,900 (credit)

Paid Fire Insurance Policy in advance

d.

Furniture $31,800 (debit)

Account Payable $31,800 (credit)

Purchased Furniture on credit

e.

Advertising Expense $260(debit)

Cash $260 (credit)

Paid Advertising Expenses

f.

Cash $685 (debit)

Service Revenue $685 (credit)

Received Cash from Service Rendered

g.

Account Payable $31,800 (debit)

Cash $31,800 (credit)

Made Payment to Furniture Supplier

Explanation:

See the Journal Entries and Narrations that prepared above.