You are presented with the following transactions for Kailynn Corporation for the month of January:

Jan. 2 Issued $10,000 of common shares for cash.

5 Provided services on account, $2,500.

6 Obtained a bank loan for $30,000.

7 Paid $40,000 to purchase a hybrid car.

9 Received a $5,000 deposit from a customer for services to be provided in the future.

12 Billed customers $20,000 for services performed during the month.

19 Paid $500 to purchase supplies.

20 Provided services for customers who paid in advance on January 9.

23 Collected $5,000 owing from customers from the January 12 transaction.

26 Received a bill for utilities of $125, due February 26.

29 Paid rent for the month, $1,500.

31 Paid $4,000 of salaries to employees.

31 Paid interest of $300 on the bank loan.

31 Paid income tax for the month, $4,000.

Instructions

For each transaction, indicate

(a) The basic type of account debited and credited (asset, liability, shareholders' equity);

(b) The specific account debited and credited (Cash, Service Revenue, etc.);

(c) Whether the specific account is increased or decreased.

Use the following format, in which the first transaction is given as an example:

(d) Prepare journal entries to record the above transactions.

Transcribed Image Text:

Account Debited Account Credited Trans Basic action Type Jan. 2 Asset Specific Basic Specific ountEffect TypeAccount Effect Increase Cash Increase Shareholders'Common equity Shares