Question: Bounce House Party Supply Ltd rents bouncy castles and inflatable

Bounce House Party Supply Ltd. rents bouncy castles and inflatable slides for parties, school fairs, and company picnics. The company also sells party supplies such as balloons, streamers, and piñatas. The company started business in September 2016 and had the following transactions in its first month:
Sept. 1 Bounce House Party Supply Ltd. issued 40,000 common shares for $260,000 cash.
1 The company took out a $160,000 bank loan with an interest rate of 6%. The loan terms require that Bounce repay $3,000 in principal on the last day of each month plus interest.
3 Bounce purchased 10 inflatable slides and bouncy castles at a cost of $140,000. The company paid
$100,000 at the time of purchase and the balance is due in 30 days.
8 Bounce purchased balloons and other party supplies costing $6,600 on account.
11 A major local company paid Bounce a $2,500 deposit to reserve all of Bounce’s inflatable’s for a grand opening function that is scheduled for the second week in October.
15 Bounce recorded its party supply sales of the first two weeks of the month. Total sales (half in cash and half on account) amounted to $8,600 and the inventory related to these sales was determined to have a cost of $5,700.
19 Bounce paid the suppliers $1,700 for goods previously purchased on account.
23 Collections from customers on account totalled $3,400.
31 Bounce made the loan payment required under the terms of the borrowing agreement.
Analyze and record these transactions using the template method.

Sale on SolutionInn
  • CreatedJune 11, 2015
  • Files Included
Post your question