Transaction 1

On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $25,000 in exchange for shares of stock. A few of their friends also purchased stock for $10,000 that was deposited in The Wire account. [Note: Combine both transactions into one entry.]

Transaction 2

The company quickly acquired $38,000 in inventory, 70% of which was acquired on open accounts that were payable after 30 days. The rest was paid for in cash.

Transaction 3

A one-year store rental lease was signed on March 1 for $1,200 per month, and rent for the first 2 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first, and the complete March 31 adjusting entry second.]

Transaction 4

The owners paid $2,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $6,500 for some advertising in local newspapers. [Note: Combine both transactions into one entry.]

Transaction 5

Sales were $74,000. Cost of merchandise sold was 75% of sales. 20% of sales were for cash. [Note: Record the complete sales entry first, and the complete expense entry second.]

Transaction 6

Wages and salaries in March were $11,200, of which $8,000 was actually paid to employees.

Transaction 7

Miscellaneous expenses were $1,600, all paid for with cash.

Transaction 8 [4 points]

On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,500 and a $3,500 note, payable in one year. Interest of 5.5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. [Note: Record the complete March 1 entry for the equipment purchase first, the complete March 31 depreciation adjusting entry second, and the complete March 31 interest adjusting entry third.]

Transaction 9

Cash dividends totaling $3,400 were paid to stockholders on March 31.