You are presented with the following transactions for Paddick Enterprises Ltd. for the month of February:
Feb. 2 Purchased supplies on account, $600.
3 Purchased equipment for $10,000 by signing a bank loan due in three months.
6 Earned service revenue of $50,000. Of this amount, $30,000 was received in cash. The balance was on account.
13 Paid $500 in dividends to shareholders.
18 A customer paid $2,000 in advance for services to be performed next month.
20 Paid the amount owing for the supplies purchased on February 2.
23 Collected $20,000 of the amount owing from the February 6 transaction.
24 Paid office expenses for the month, $22,000.
27 Recorded salaries due to employees for work performed during the month, $14,000.
28 Paid interest of $50 on the bank loan signed on February 3.
Instructions
(a) For each of the above transactions, prepare a (1) basic analysis, (2) equation analysis, and (3) debit-credit analysis.
(b) Prepare journal entries to record each of the above transactions.