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 note 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 $1,000 in dividends to shareholders.
18 A customer paid $2,000 in advance for services to be rendered in the future.
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 operating expenses for the month, $22,000.
25 The services for the customer who paid in advance on February 18 were performed.
27 Recorded salaries due to employees for work performed during the month, $14,000.
28 Paid interest of $100 on the note issued on February 3.
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 Feb. 2 Asset Supplies Specific Account Specific Account Basic Effect Increase Effect Increase LiabilityAccountsIndc Payable