Question

During the current year, the company had the following summarized activities: Purchased short-term investments for $10,000 cash. Lent $5,000 to a supplier, who signed a two-year note. Purchased equipment that cost $18,000; paid $5,000 cash and signed a one-year note for the balance. Hired a new president at the end of the year. The contract was for $85,000 per year plus options to purchase company stock at a set price based on company performance. The new president begins her position on January 1 of next year. Issued an additional 2,000 shares of $0.50 par value common stock for $11,000 cash. Borrowed $9,000 cash from a local bank, payable in three months. Purchased a patent (an intangible asset) for $3,000 cash. Built an addition to the factory for $24,000; paid $8,000 in cash and signed a three-year note for the balance. Returned defective equipment to the manufacturer, receiving a cash refund of $1,000.

Answer 1

Answer:

short-term investment 10,000 debit

                     cash                10,000 credit

note receivables           5,000 debit

                cash                         5,000 credit

equipment                  18,000 debit

        cash                          5,000 credit

         note payable           13,000 credit

cash              11,000 debit

     common stock          1,000 credit

     additional CS          10,000 credit

cash               9,000 debit

    note payable             9,000 credit

Patents      3,000 credit

          cash                   3,000 debit

Building    24,000 debit

      cash               8,000 credit

     note payable 16,000 credit

cash         1,000 debit

  equipment          1,000 credit

Explanation:

To record the entries we need to alwasy make debit = credit

we must use account names to represent each concept which are quite easy you don't have to overthink ou write what it is telling you it happen

Whe nthe company use cash use cash account

when it purchase equipment use equiptment