Ryan Olson organized a new company, MeToo, Inc. The company provides networking management services on social network sites. You have been hired to record the following transactions. a. May 1: Issued 850 shares of common stock to investors for $20 per share. b. May 15: Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years. c. May 31: Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance. d. June 3: Purchased furniture for the store for $22,600 on account. The amount is due within 30 days. e. June 5: Placed advertisements in local college newspapers today for a total of $715 cash. f. June 9: Provided services for $605 cash. g. June 14: Made full payment for the furniture purchased on account on June 3.

Question

Business

Lydia Rosario

2 May, 06:54

Ryan Olson organized a new company, MeToo, Inc. The company provides networking management services on social network sites. You have been hired to record the following transactions. a. May 1: Issued 850 shares of common stock to investors for $20 per share. b. May 15: Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years. c. May 31: Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance. d. June 3: Purchased furniture for the store for $22,600 on account. The amount is due within 30 days. e. June 5: Placed advertisements in local college newspapers today for a total of $715 cash. f. June 9: Provided services for $605 cash. g. June 14: Made full payment for the furniture purchased on account on June 3.

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Maurice Erickson · Answer 1

MeToo, Inc.

Journal Entries

Sr. No Accounts Dr. Cr.

May 1 Cash 17000

Common Stock 17000

Issued 850 shares of common stock to investors for $20 per share

May 15: Cash 46,500

Notes Payable 46,500

Borrowed $46,500 from the bank to provide additional funding to begin operations; the note is due in two years.

May 31: Prepaid Insurance 4800

Cash 4800

Paid $4,800 for a one-year fire insurance policy with coverage starting June 1. TIP: For convenience, simply record the full amount of the payment as an asset (Prepaid Insurance). At the end of June, this account will be adjusted to its proper balance.

June 3: Furniture 22600

Accounts Payable 22600

Purchased furniture for the store for $22,600 on account. The amount is due within 30 days.

June 5: Advertisement 715

Cash 715

Placed advertisements in local college newspapers today for a total of $715 cash.

June 9: Cash 605

Services Revenue 605

Provided services for $605 cash.

June 14: Accounts Payable 22600

Cash 22600

Made full payment for the furniture purchased on account on June 3.

June 30 Insurance Expense 400

Prepaid Insurance 400

$ 4800/12 = $ 400 adjustment of one month insurance expense.