Selected transactions for Warner Advertising Company, Inc., are listed here.
1. Issued common stock to investors in exchange for cash received from investors.
2. Paid monthly rent.
3. Received cash from customers when service was performed.
4. Billed customers for services performed.
5. Paid dividend to stockholders.
6. Incurred advertising expense on account.
7. Received cash from customers billed in (4).
8. Purchased additional equipment for cash.
9. Purchased equipment on account.
Describe the effect of each transaction on assets, liabilities, and stockholders’ equity. For example, the first answer is (1) Increase in assets and increase in stockholders’ equity.