Question

Whispering Winds Corp. had the following transactions. 1. Sold land (cost $7,200) for $9,000. 2. Issued common stock at par for $22,900. 3. Recorded depreciation on buildings for $16,600. 4. Paid salaries of $7,000. 5. Issued 1,100 shares of $1 par value common stock for equipment worth $9,200. 6. Sold equipment (cost $14,400, accumulated depreciation $10,080) for $1,728. (a) For each transaction above, prepare the journal entry.

Answer 1

Answer and Explanation:

The journal entries are shown below:

1 Cash $9,000  

         To  Land $7,200

         To Gain on Disposal $1,800

(Being the land is sold is recorded)

2 Cash $22,900

             To Common Stock $22,900

(being the issuance of the common stock is recorded)

3 Depreciation Expense $16,600

        To Accumulated Depreciation -  Buildings  $16,600

(being depreciation expense is recorded)

4 Salaries and Wages Expense $7,000

        To   Cash $7,000

(being salary paid is recorded)

5 Equipment $9,200

     To Common Stock $1,100

     To Paid in capital in excess of par-Common stock $8,100

(Being the common stock issued for the equipment)

6 Cash $1,728

  Accumulated Depreciation-Equipment $10,080

   Loss on Disposal $2,592

                 To Equipment $14,400

(being equipment sold is recorded)