Paid $5,400 to a creditor on account. Show how each transaction would be recorde
ID: 2410921 • Letter: P
Question
Paid $5,400 to a creditor on account.
Show how each transaction would be recorded in the accounting equation.
1. John Amos started the business with a cash investment of $41,000. 2. Purchased equipment for $12,500 on credit. 3. Performed services for $4,000 in cash. 4. Purchased additional equipment for $2,700 in cash. 5. Performed services for $4,100 on credit. 6. Paid salaries of $3,500 to employees. 7. Received $1,300 cash from charge account customers. 8.Paid $5,400 to a creditor on account.
Show how each transaction would be recorded in the accounting equation.
Explanation / Answer
S.No
Particulars
Debit
Credit
1
Cash
41000
Capital
41000
2
Equipment
12500
Account Payable
12500
3
Cash
4000
Service fee
4000
4
Equipment
2700
Cash
2700
5
Account Receivable
4100
Service Fee
4100
6
Salary
3500
Cash
3500
7
Cash
1300
Account Receivable
1300
8
Account Payable
5400
Cash
5400
S.No
Particulars
Debit
Credit
1
Cash
41000
Capital
41000
2
Equipment
12500
Account Payable
12500
3
Cash
4000
Service fee
4000
4
Equipment
2700
Cash
2700
5
Account Receivable
4100
Service Fee
4100
6
Salary
3500
Cash
3500
7
Cash
1300
Account Receivable
1300
8
Account Payable
5400
Cash
5400
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