Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 5

Identifying Transactions and Preparing Journal Entries
Sweet Shop Co. is a chain of candy stores that has been in operation for the past ten years. Prepare journal entries for the following events, which occurred at the end of the most recent year. If the event is not a transaction, write "no transaction."
a. Ordered and received $12,000 worth of cotton candy machines from Candy Makers Inc., which Sweet Shop Co. will pay for in 45 days.
b. Sent a check for $6,000 to Candy Makers Inc. for the cotton candy machines from (a).
c. Received $400 from customers who bought candy on account in previous months.
d. To help raise funds for store upgrades estimated to cost $20,000, Sweet Shop Co. issued 1,000 common shares for $15 each to existing stockholders.
e. Sweet Shop Co. bought ice cream trucks for $60,000 total, paying $10,000 cash and signing a long-term note for $50,000.