Green Wave Company plans to own and operate a storage rental facility. For the first month of

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Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions.

1. Issue 10,000 shares of common stock in exchange for $42,000 in cash.

2. Purchase land for $24,000. A note payable is signed for the full amount.

3. Purchase storage container equipment for $9,000 cash.

4. Hire three employees for $3,000 per month.

5. Receive cash of $13,000 in rental fees for the current month.

6. Purchase office supplies for $3,000 on account.

7. Pay employees $9,000 for the first month’s salaries.


Required:

1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense.

2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a beginning balance of zero.

3. After calculating the ending balance of each account, prepare a trial balance.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For  answer-question

Financial Accounting

ISBN: 978-0078025549

3rd edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

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