Answer and Explanation:
The Journal entry is shown below:-
1. Cash Dr, $400,000
To Common Stock capital $400,000
(Being cash is recorded)
2. Equipment Dr, $60,000
To Cash $15,000
To Note payable $45,000
(Being equipment is recorded)
3. Inventory Dr, $122,000
To Accounts payable $122,000
(Being purchase of inventory is recorded)
4. Accounts receivable $170,000
To Sales revenue $170,000
(Being sales revenue is recorded)
Cost of goods sold Dr, $102,000
To Inventory $102,000
(Being cost of goods sold is recorded)
5. Rent expenses Dr, $5,500
To Cash $5,500
(Being rent expenses is recorded)
6. Prepaid Insurance Dr, $6,550
To Cash $6,550
(Being insurance is recorded)
7. Accounts Payable Dr, $102,000
To Cash $102,000
(Being accounts payable is recorded)
8. Cash Dr, $76,500
To Accounts receivable $76,500
(Being cash is recorded)
9. Depreciation expenses Dr, $1,500
To Accumulated depreciation $1,500
(Being depreciation expenses is recorded)
