Answer:
Wainwright Corporation
Journal Entries:
a. Debit Cash $280,000
Credit Common Stock $280,000
To record the issuance of common stock shares for cash.
b. Debit Equipment $36,000
Credit Cash $9,000
Credit Notes payable $27,000
To record the purchase of equipment.
c. Debit Inventory $86,000
Credit Accounts payable $86,000
To record the purchase of inventory on account.
d. Debit Cost of goods sold $66,000
Credit Inventory $66,000
To record the cost of goods sold.
d. Debit Accounts Receivable $110,000
Credit Sales Revenue $110,000
To record the sale of goods on account.
e. Debit Rent expense $4,000
Credit Cash $4,000
To record the payment of rent for the month.
f. Debit Prepaid Insurance $5,800
Credit Cash $5,800
To record the prepayment of insurance for one year, beginning April 1.
f. Debit Accounts payable $66,000
Credit Cash $66,000
To record the payment on account.
g. Debit Cash $49,500
Credit Accounts Receivable $49,500
To record the collection of cash on account.
h. Debit Depreciation Expense $900
Credit Accumulated Depreciation - Equipment $900
To record the depreciation expense for the month.
Explanation:
Journal entries are used by Wainwright Corporation to record its business transactions as they occur daily. They are the first records of business transactions in the accounting books. They show the accounts to be debited and the others to be credited. They are also used to record adjustments.
