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Quiz 1 Answers

Quiz 1 Answers - Cash A 50,000 Notes payable L 50,000 3...

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Name ___________________________ USC ID# _________________________ QUIZ 1 Prepare journal entries in good format, for each of the following transactions. Categorize each as an Asset (A), liability (L), stockholders’ equity (SE), revenue (R), or expense (E) and whether the entry increases (+) or decreases (-) the account. For example: Placed advertisement in local newspaper for $350, paid in cash Advertising expense (+E, -SE) 350 Cash (-A) 350 1. Issued 1,000 shares of stock to investors for cash at $10 per share Cash (+A) 10,000 Common stock (+SE) 10,000 2. Borrowed $50,000 from the bank to provide funds for operations, the note is due in 3 years
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Unformatted text preview: Cash (+A) 50,000 Notes payable (+L) 50,000 3. Paid $1,200 for a one year liability insurance policy that will be effective the next month Prepaid insurance (+A) 1,200 Cash (-A) 1,200 4. Purchased equipment costing $25,000, paying $5,000 cash with the remainder due in 30 days. Equipment (+A) 25,000 Cash (-A) 5,000 Accounts payable (+L) 20,000 5. Made full payment on the equipment purchased on account in 4. above Accounts payable (-L) 20,000 Cash (-A) 20,000 Page 1 of 1...
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