The following transactions occurred in the first month of operations and are reflected in the gneral ledger
Question:
The following transactions occurred in the first month of operations and are reflected in the géneral ledger account balances. Please explain what these mean and what I would do with them in a general Ledger.
July 1. 2020. Liz Burnes and her brother, James each invested $15,000 in a corporation they formed
to run Diner 64, Inc. Each were issued 1,500 shares of $10 par value common stock.
July 1, 2020 The corporation took a $30,000 small business loan from a local bank. The loan is an
'interest only' loan for three years at a fixed rate of 12% per year. A balloon payment of the principal will be due in 3 years. The monthly interest payment is due by the 10th of the following month.
July 1,2020. Because this was a new business, the landlord required the business to prepay
$6,000 for the rent for the first six month, plus a $1,500 security deposit for a total cash outlay
of $7.500.
July 1, 2020 The business purchased equipment and fixtures for $20,000 in cash.
The assets have a useful life of 10 years.
July 1, 2020 The company purchased à delivery van value at $40,000 with a $15,000 down payment and a 3-year, $25,000 note payable with an annual intereste rate of 6%. The truck has a 10-year useful life. The monthly payment including principal and interest is $760.55.
July 8, 2020 Preston Hill, a local Bed & Breakfast (B & B), arranges with Diner 64 to provide breakfast for their guests at $10 per person per day. Diner 64 will bill the B & B at the end of each month for the meals provided. Payment is required by the 10th of the next month
July 15,2020 Paid $4 800 for two-year fire and liability insurance with coverage beginning September 1. 2020
