analyze each of the transactions. For each decide what accounts are affected and
ID: 2347915 • Letter: A
Question
analyze each of the transactions. For each decide what accounts are affected and set up T accounts. Record the effects of the transaction in the T accounts. Use plus and minus signs before the amounts to show the increases and decreases in excel1. James Walker, an owner, made an additional investment of $16,000 in cash.
2. A firm purchased equipment for $9,000 in cash.
3. A firm sold some surplus office furniture for $1,200 in cash.
4. A firm purchased a computer for $2,700, to be paid in 60 days.
5. A firm purchased office equipment for $10,200 on credit. The amount is due in 60 days.
6. Carol Rose, owner of Rose Travel Agency, withdrew $5,000 of her original cash investment.
7. A firm bought a delivery truck for $32,000 on credit; payment is due in 90 days.
8. A firm issued a check for $2,500 to a supplier in partial payment of an open account balance.
Explanation / Answer
Debit Cash $100,000 Credit Common Stock $100,000 Sept. 1 Purchased for $180,000 all of the equipment formerly owned by Rent-It. Paid $70,000 cash and issued a one-year note payable for $110,000. The note has an 8% interest rate and interest is payable when the note is due. Debit Equipment $180,000 Credit Cash $70,000 Credit Notes Payable $110,000 Sept. 1 Paid $9,000 to Dundee Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It. Debit Rent Expense $3,000 Debit Prepaid Rent $6,000 Credit Cash $9,000 Sept. 1 Purchased a piece of equipment for $35,000 cash. Debit Equipment $35,000 Credit Cash $35,000
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