Question

Journalize the transactions. ( This information relates to Cheyenne Real Estate Agency. Oct. 1 Stockholders invest $31,770 in exchange for common stock of the corporation. 2 Hires an administrative assistant at an annual salary of $42,720. 3 Buys office furniture for $3,740, on account.

Answer 1

Answer and Explanation:

The journal entry is given below:

Oct 1

Cash Dr $31,770

   To Common stock $31,770

(Being exchange for the common stock is recorded)

Here cash is debited as it increased the asset and credited the common stock as it also increased the equity

Oct 2

No journal entry is required

Oct 3

Office furniture Dr $3,740

    To Account payable $3,740

(Being office furniture purchased on an account)

Here office furniture is debited as it increased the asset and credited the account payable as it also increased the liabilities