Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions.

External Transaction Accounts Debit Credit

$1.$ Owners invest $$15,000$ in the company and receive common stock. Common Stock $15,000$

Cash $15,000$

$2.$ Receive cash of $$4,000$ for services provided in the current period. Cash $4,000$

Service Revenue $4,000$

$3.$ Purchase office supplies on account, $$300.$ Supplies $300$

Cash $300$

$4.$ Pay $$600$ for next month's rent. Rent Expense $600$

Cash $600$

$5.$ Purchase office equipment with cash of $$2,200.$ Cash $2,200$

Equipment $2,200$

Required:

$1.$ Assess whether the proposed entries are correct or incorrect.

$2.$ Provide a correct entry for each of the transactions classified as incorrect.

Answer rating: 100% (QA)

Answer Analysis of Scarlet Knight Corporation Transactions 1 Assessment of Proposed Entries The prop... View the full answer