Chapter 3, Problem 3.9AMCP

Journal Entries

Castle Consulting Agency began business in February. The transactions entered into by Castle during its first month of operations are as follows:

1. Acquired articles of incorporation from the state and issued 10,000 shares of capital stock in exchange for $150,000 in cash.
2. Paid monthly rent of $400.
3. Signed a five-year promissory note for $100,000 at the bank.
4. Purchased software to be used on future jobs. The software costs $950 and is expected to be used on five to eight jobs over the next two years.
5. Billed customers $12,500 for work performed during the month.
6. Paid office personnel $3,000 for the month of February.
7. Received a utility bill of $100. The total amount is due in 30 days.

Required

Prepare in journal form, the entry to record each transaction.