This information relates to Ayayai Real Estate Agency.
Oct. 1 | Stockholders invest $31,460 in exchange for common stock of the corporation. | |
2 | Hires an administrative assistant at an annual salary of $31,800. | |
3 | Buys office furniture for $3,810, on account. | |
6 | Sells a house and lot for E. C. Roads; commissions due from Roads, $11,020 (not paid by Roads at this time). | |
10 | Receives cash of $230 as commission for acting as rental agent renting an apartment. | |
27 | Pays $780 on account for the office furniture purchased on October 3. | |
30 | Pays the administrative assistant $2,650 in salary for October. |
Prepare the debit–credit analysis for each transaction.
(If there is no transaction, then enter No Effect for
the account and 0 for the amount.)
Date | Debt Analysis | Debit Amount | Credit Analysis | Credit Amount |
Oct. 1 | Cash Account is debited because cash is an asset and it always has debit balance and when issue of shares, cash comes into the business so it increases, hence, debited. | $31,460 | Common Stock Account is credited because it is an equity account and it always has credit balance. When common stock is issued, it increases so it is credited. | $31,460 |
Oct. 2 | No Effect because it is not a transaction. | $0 | No Effect because it is not a transaction. | $0 |
Oct. 3 | Furniture Account is debited because furniture is an asset and it always has debit balance and when furniture is purchases, its balance increases, hence, it is debited. | $3,810 | Accounts Payable Account is credited because it is a liability account and it always has a credit balance. When furniture is purchased on account, liability increases so it is credited. | $3,810 |
Oct. 6 | Accounts Receivable Account is debited because Accounts Receivable is an asset and it always has a debit balance and commision is earned, the amount is not received, hence, it will be treated as asset, thus, it is debited. | $11,020 | Commission Revenue Account is credited because it is a revenue account and it always has credit balance. When commission revenue is earned, the revenue account increases, thus, it is credited. | $11,020 |
Oct. 10 | Cash Account is debited because cash is an asset and it always has debit balance and when cash is received, its balance increases, thus, it is debited. | $230 | Commission Revenue Account is credited because it is a revenue account and it always has credit balance. When commission revenue is earned, the revenue account increases, thus, it is credited. | $230 |
Oct. 27 | Accounts Payable Account is debited because it is a liability account which is decreased due to settlement of the account, hence, it is debited. | $780 | Cash Account is credited because it decreases due to payment made to creditors. | $780 |
Oct. 30 | Salaries Expense Account is debited because is is an expense account and it always has debit balance. When salaries expense is accrued then it increases, thus, it is debited. | $2,650 | Cash Account is credited because it decreases due to payment made to administrative assistant. | $2,650 |
This information relates to Ayayai Real Estate Agency. Oct. 1 Stockholders invest $31,460 in exchange for...
Policies Tent Attempt in Progress This information relates to Ayayai Real Estate Agency. Oct. 1 Stockholders invest $31,460 in exchange for common stock of the corporation 2 Hires an administrative assistant at an annual salary of $31,800. 3 Buys office furniture for $3,810, on account. 6 Sells a house and lot for E.C. Roads: commissions due from Roads, $11.020 (not paid by Roads at this time). 10 Receives cash of $230 as commission for acting as rental agent renting an...
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-/1 This information relates to Ayayai Real Estate Agency Oct. 1 2 3 6 10 Stockholders invest $31.460 in exchange for common stock of the corporation. Hires an administrative assistant at an annual salary of $31.800. Buys office furniture for $3,810, on account. Sells a house and lot for E.C. Roads, commissions due from Roads, $11,020 (not paid by Roads at this time). Receives cash of $230 as commission for acting as rental agent renting an apartment Pays $780 on...
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