Answer:
(A) Cash +30,000 Dr
(L) Notes payable +30,000 Cr
(A) Notes receivable +10,000 Dr
(A) Cash - 10,000 Cr
(A) Cash +500 Dr
(S) Common stock +10 Cr
(S) Additional paid-in capital +490 Cr
(A) Equipment +15,000 Dr
(A) Cash -5,000 Cr
(L) Notes payable +10,000 Cr
(A) Cash -2,000 Cr
(S) Retained earnings -2,000 Dr
Explanation:
(A) = Assets
(L) = Liabilities
(S) = Stockholders' Equity
(A) = (L) + (S)
Borrowed $30,000 from a local bank.
A bank loan is a cash debit with liabilities credit
(A) Cash +30,000 Dr
(L) Notes payable +30,000 Cr
Lent $10,000 to an affiliate; accepted a note due in one year.
Two assets are involved in the operation: the first is the receivable that was accepted for one year, and the second is a cash outflow
(A) Notes receivable +10,000 Dr
(A) Cash - 10,000 Cr
Sold to investors 100 additional shares of stock with a par value of $0.10 per share and a market price of $5 per share; received cash.
The sale of 100 shares at $5 (market price) each is a cash debit of 100 x $5 = $500. A credit must be made to the "Common Stock" account of the number of shares for the nominal value, that is 100 x $0.10 = $10; Finally, a credit is made to the "Additional paid-in capital" account for the difference between $500 and $10, that is $490.
(A) Cash +500 Dr
(S) Common stock +10 Cr
(S) Additional paid-in capital +490 Cr
Purchased $15,000 of equipment, paying $5,000 cash and signing a note for the rest due in one year.
Three accounts are affected in the operation: Equipment has a debit of $15,000 which is its purchase value; then there is a $5,000 cash credit that was paid in cash; and a Note payable from the rest, that is a credit of $10,000 ($15,000 - $5,000).
(A) Equipment +15,000 Dr
(A) Cash -5,000 Cr
(L) Notes payable +10,000 Cr
Declared and paid $2,000 in dividends to stockholders.
A debit of $ 2,000 is made to retained earnings to deduct your balance; then a credit or cash out is made for the same amount $ 2,000 that was paid.
(A) Cash -2,000 Cr
(S) Retained earnings -2,000 Dr
Hope this helps!
