Analyze transactions a–g, using the example that follows.
a. Melissa Faubert invested $2,400 in cash to establish Faubert’s Beauty Parlor.
b. Paid two months’ rent in advance, $1,680.
c. Purchased supplies on credit, $120.
d. Received cash for salon services, $600.
e. Paid for supplies purchased in c.
f. Paid utility bill, $72.
g. Withdrew $100 in cash.
Example
a. The asset account Cash was increased. Increases in assets are recorded by debits. Debit Cash $2,400. A component of owner’s equity, M. Faubert, Capital, was increased. Increases in owner’s capital are recorded by credits. Credit M. Faubert, Capital $2,400.