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Ch 2-Exercise- journalising posting_1_-1

Ch 2-Exercise- journalising posting_1_-1 - CLASS ROOM...

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CLASS ROOM EXERCISE – AN ILLUSTRATION Jan 20 . Michael McBryan and his family invested cash in exchange for capital stock. (Name of the business Overnight Auto Service) JOURNAL ENTRY Jan 20 Cash 80,000 Capital Stock 80,000 Owners invest cash in the business ENTRIES IN LEDGER ACCOUNTS Cash Capital Stock 20/1 80,000 20/1 80,000 Jan 21. Overnight Auto Service purchased land for $52,000 for cash. JOURNAL ENTRY Jan 21 Land 52,000 Cash 52,000 Purchased Land for business site
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ENTRIES IN LEDGER ACCOUNTS Land Cash 21/1 52,000 20/1 80,000 21/1 52,000 Jan 22 . Overnight purchased a building. The purchase price was $36,000. Overnight made a $6,000 cash down payment and issued a 90-day, non-interest-bearing note payable for the remaining $30,000. JOURNAL ENTRY Jan 22 Building 36,000 Cash 6,000 Note Payable 30,000 Purchased building. Paid part cash; Balance payable within 90 days ENTRIES IN LEDGER ACCOUNTS Cash Note Payable 20/1 80,000 21/1 52,000 22/1 30,000 22/1 6,000 Building 22/1 36,000
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Jan 23. Overnight purchased tools and equipment on account from Snappy Tools. The purchase price was $ 13,800 due in 60 days.
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