Bounce House Party Supply Ltd rents bouncy castles and infla

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:

Date:

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 inflatables 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.

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 inflatables 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.

Required Analyze and record these transactions using the template method. ASSETS LIABILITIES SHEQUITY Inflatable Equip Unearned Revenue Loan Payable Common Shares Retained Earnings Date/Ref Cash A/R Inv. A/P REDD

Solution

Note:

1. 6% Rate of interest is considered as per annum interest.

2016	Asset	Asset	Asset	Asset		Liabilities	Liabilities	Liabilities		S/H Equity	S/H Equity
Date/Ref.	Cash	A/R	Inv.	Inflatable Equip.		A/P	Unearned Revenue	Loan Payable		Common Shares	Retained Earnings		R/E/DD
September 1	260000	0	0	0		0	0	0		260000	0		260000
September 1	160000	0	0	0		0	0	160000		0	0		420000
September 3	-100000	0	0	140000		40000	0	0		0	0		460000
September 8	0	0	6600	0		6600	0	0		0	0		466600
September 11	2500	0	0	0		0	2500	0		0	0		469100
September 15	4300	4300	-5700	0		0	0	0		0	2900		472000
September 19	-1700	0	0	0		-1700	0	0		0	0		470300
September 23	3400	-3400	0	0		0	0	0		0	0		470300
September 31	-3800	0	0	0		0	0	-3000		0	-800		466500