Rowand Enterprises had the following selected transactions. 1. Aaron Rowand inve
ID: 2389155 • Letter: R
Question
Rowand Enterprises had the following selected transactions.
1. Aaron Rowand invested $4,000 cash in the business in exchange for common stock.
2. Paid office rent of $1,100.
3. Performed consulting services and billed a client $5,200.
4. Paid $700 cash dividend.
Instructions
(a) Indicate the effect each transaction has on the basic equation (Assets = Liabilities + Owner's Equity).
Assets = Liabilities + Stockholder's Equity
1.
2.
3.
4.
(b) Journalize each transaction.
Description/Account Debit Credit
1.
2.
3.
4.
Explanation / Answer
assests
=
Liabilities
+
Owners equity
1
increase
No effect
increase
2
decrease
No effect
decrease
3
increase
No effect
increase
4
decrease
No effect
decrease
account
debit
credit
cash
4000
Rowland capital
4000
expense
1100
cash
1100
receivable
5200
revenue
5200
drawing
700
cash
700
account
debit
credit
cash
5000
Notes payable
5000
computer
2500
cash
2500
supplies
700
payable
700
assests
=
Liabilities
+
Owners equity
1
increase
No effect
increase
2
decrease
No effect
decrease
3
increase
No effect
increase
4
decrease
No effect
decrease
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