Ed runs an auto repair business out of the garage attached to his personal residence.
How should he account for each of the following items?
a. Cash received from repair services, $28,000.
b. Interest paid on his home mortgage, $7,300.
c. Power jack hoist purchased at a cost of $12,000.
d. Electricity bills, $3,600. (Ed does not have separate electricity service to the garage.)
e. Checks received from customers that were returned by his bank, $1,600. The bank charged Ed's account $35 for processing the bad checks.
f. Telephone bill for phone in the garage, $420. (Ed has a separately listed phone in his house.)
g. Advertising in the local newspaper, $800.
h. Interest paid on home furniture loan, $600.