Selected transactions for Loving Home, an interior decorator corporation, in its first month of business, are as
Question:
Selected transactions for Loving Home, an interior decorator corporation, in its first month of business, are as follows.
1. Issued stock to investors for $15,000 in cash.
2. Purchased used car for $8,000 cash for use in business.
3. Purchased supplies on account for $300.
4. Billed customers $3,600 for services performed.
5. Paid $200 cash for advertising start of the business.
6. Received $1,100 cash from customers billed in transaction (4).
7. Paid creditor $300 cash on account.
8. Paid dividends of $400 cash to stockholders.
Instructions
(a) For each transaction indicate (a) the basic type of account debited and credited (asset, liability, stockholders' equity); (b) the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); (c) whether the specific account is increased or decreased; and (d) the normal balance of the specific account. Use the following format, in which transaction 1 is given as an example.
(b) Journalize the transactions. Do not provideexplanations.
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso