126.The ABC Corporation was formed on January 1, 2016. The three initial owners each invested $100,000 cash and each received 10,000 shares of $1 par value common stock. Below are selected transactions that were completed during January, 2016.
1. Issue shares of common stock to the owners.
2. Borrowed $80,000 on a one-year note payable.
3. Purchased land by signing a $70,000 note payable.
4. Paid $10,000 of accounts payable.
5. Purchased two service vehicles for cash at a cost of $24,000 each.
6. Purchased $2,000 of supplies on credit.
Prepare the journal entry on ABC's books for each transaction. Include a brief explanation for each entry.
127.The accounts with identification letters for Ward Company are listed below.
COffice supplies inventory
IAdditional paid-in capital
During 2016, the company completed the transactions given below. You are to indicate the appropriate journal entry for each transaction by giving the account letter and amount. Some entries may need three letters. The first transaction is provided as an example.
1.Borrowed $50,000 and signed a note.A$50,000G$50,000
2.Purchased equipment for $50,000. Paid $10,000 cash, signed $40,000 note payable.
3.Collected $15,000 of accounts receivable.
4.Paid $12,000 of accounts payable.
5.Issued 10,000 shares of $10 par value common stock in exchange for $160,000 cash.
6.Purchased $5,000 office supplies on credit.
7.Paid for the office supplies in (6).