Nike Inc is one of the world leading atheletic shoes manufacturer. The following activities occurs during the recent year: Purchased additional buildings for $176 and equipment for $270; paid $408 in cash and signed a long-term note for the rest. Issued 120 shares of $2 par value common stock for $345 cash. Declared $145 in dividends to be paid in the following year. Purchased additional short-term investments for $7,616 cash. Several Cannon Sporting Goods investors sold their own stock to other investors on the stock exchange for $86. Sold $4,413 in short-term investments for $4,413 in cash.Prepare journal entries.

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andromache andromache · Answer 1 · 2020-02-17T07:37:16+01:00

Explanation:

The journal entries are shown below:

1. Building A/c Dr $176

Equipment A/c Dr $270

To Cash A/c $408

To Note payable A/c $38

(Being the building and the equipment is purchased for cash and note payable)

2. Cash A/c Dr $345

To Common stock $240 (120 shares × $2)

To Additional paid in capital A/c - Common stock A/c $105

(Being the common stock is issued for cash)

3. Retained earnings A/c Dr $145

To Dividend payable A/c $145

(Being the dividend is declared)

4. Short - term investment A/c Dr $7,616

To Cash A/c $7,616

(Being the short term investment is purchased for cash)

5. No journal entry is required

6. Cash A/c Dr $4,413

To Short - term investment A/c $4,413

(Being the short-term investment is purchased)