The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation. One-half of the total cost is paid in cash; the other half is financed. How should the company record this transaction?
A. Debit cash for $250,000, debit notes payable for $250,000, and credit equipment for $500,000.
B. Debit equipment for $500,000, credit cash for $250,000, and credit notes payable for $250,000.
C. Debit cash for $250,000, debit notes payable for $250,000 credit equipment for $450,000, and credit expenses for $50,000.
D. Debit equipment for $450,000, debit expenses for $50,000, credit cash for $250,000, and credit notes payable for $250,000.
1st EditionGlencoe McGraw-Hill
4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas
16th EditionMadhav V Rajan, Srikant M. Datar
9th EditionFrank Hodge, Patricia A. Libby, Robert Libby
ACCOUNTING Nuncio Consulting completed the following transactions during June. a. Armand Nuncio, the owner, invested $35,000 cash along with office equipment valued at$11,000 in the new company in exchange for common stock. b. The company purchased land valued at $7,500 and a building valued at$40,000. The purchase is paid with $15,000 cash and a long-term note payable for$32,500. c. The company purchased $500 of office supplies on credit. d. Nuncio invested his personal automobile in the company in exchange for more common stock. The automobile has a value of$8,000 and is to be used exclusively in the business. e. The company purchased $1,200 of additional office equipment on credit. f. The company paid$1,000 cash salary to an assistant. g. The company provided services to a client and collected $3,200 cash. h. The company paid$540 cash for this month’s utilities. i. The company paid $500 cash to settle the payable created in transaction c. j. The company purchased$3,400 of new office equipment by paying $3,400 cash. k. The company completed$4,200 of services for a client, who must pay within 30 days. l. The company paid $1,000 cash salary to an assistant. m. The company received$2,200 cash in partial payment on the receivable created in transaction k. n. The company paid $1,100 cash in dividends. 1. Prepare general journal entries to record these transactions (use account titles listed in part 2). 2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting. 3. Prepare a trial balance as of the end of June. ACCOUNTING During 2018, LeBron Corporation accepts the following notes receivable. a. On April 1, LeBron provides services to a customer on account. The customer signs a four-month, 9% note for $7,000. b. On June 1, LeBron lends cash to one of the company's vendors by accepting a six-month, 10% note for$11,000. c. On November 1, LeBron accepts payment for prior services by having a customer with a past-due account receivable sign a three-month, 8% note for $6,000. Record the acceptance of each of the notes receivable.