Question

Issued common stock at par for $23,700.Recorded depreciation on buildings for $16,900.Paid salaries of $6,400.Issued 1,300 shares of $1 par value common stock for equipment worth $8,000.Sold equipment (cost $11,800, accumulated depreciation $8,260) for $1,416. For each transaction above, prepare the journal entry.

Answer 1

Explanation:

The journal entries are shown below:

1. Cash A/c Dr 23,700

       To Common stock A/c 23,700

(Being the common stock is issued for cash)

2. Depreciation Expense A/c Dr $16,900

                 To Accumulated Depreciation - Buildings A/c $16,900

(Being depreciation expense is recorded)

3. Salaries expense A/c Dr $6,400

          To Cash A/c $6,400

(Being the salaries expense is paid for cash)

4. Equipment A/c Dr $8,000

         To Common stock A/c  $1,300

         To Additional paid-in capital in excess of par value A/c $6,700

(Being the equipment is purchased)

5. Cash A/c Dr $1,416

   Accumulated depreciation - Equipment A/c Dr $8,260

   Loss on sale of equipment A/c Dr $2,124

              To Equipment A/c $11,800

(Being the equipment is sold)