Question

b. c. d. e. Borrowed money from a bank Provided services on account Purchased inventory on account Collected cash from customers that owed a balance due SE2-3. Debit and Credit Effects Indicate the account that will be credited for each of the following LO transactions: a. Issued common stock for cash b. Borrowed money from a bank c. Provided services on account d. Purchased inventory on account e. Collected cash from customers that owed a balance due SE2-4. Determine a Transaction The Pearce Company recorded a transaction by debiting Accounts LO4 Receivable and crediting Sales Revenue. What event was being recorded? Determine the Cash Balance The beginning-of-the-period cash balance for the Travis Company was a $12,000 debit. Cash sales for the month were $6,000 and sales on account were $8,000. The company paid $2,500 cash for current-period purchases and also paid $3,000 cash for amounts due from last month. What is the ending debit or credit balance in the Cash account? SE2-5. LO4 SE2-6. Recording Transactions with the Accounting Equation During the year, the Decker Company expe- LO2 rienced the following accounting transactions: 1. Issued common stock in the amount of $100,000 2. Paid a $30,000 cash dividend 3. Borrowed $25,000 from a bank 4. Made a principal payment of $2,500 on an outstanding bank loan 5. Made an interest payment of $1,200 on an outstanding bank loan Using the accounting equation, record each of the transactions in columnar format using the following template:

Answer 1

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SE2-3
		Additional things
a	Common Stock will be credited	Cash will be debited
	Since cash is received against sale of common stock.
b	Note Payable will be credited	Cash will be debited
	Since cash is received against borrowing from bank
c	Service Revenue will be credited	Accounts Receivable will be debited
	Income account is always credited
d	Accounts Payable will be credited	Inventory will be debited
	Liabilities are always credit
e	Accounts Receivable will be credited	Cash will be debited
	Reduction in asset, hance credited
SE2-4	Sales has been made on account to customers.
SE2-5
	Beginning Balance		$             12,000
	Add: Cash Sales		$               6,000
	Less: Payment for Current Period purchases		$              -2,500
	Less: Amount due for last month paid		$              -3,000
	Ending Debit Cash Balance		$             12,500
SE2-6
	Asset	Liabilities	Common Stockholder Equity
	Cash	Note Payable	Common Stock	Retained Earning
1.	$                                                          100,000		$           100,000
2.	$                                                           -30,000			$               -30,000
3.	$                                                            25,000	$                                               25,000
4.	$                                                             -2,500	$                                                -2,500
5.	$                                                             -1,200			$                 -1,200
Total	$                                                            91,300	$                                               22,500	$           100,000	$               -31,200
Journal Entries:
	Accounts	Debit	Credit
1.	Cash	$                                             100,000
	Common Stock		$           100,000
	(being sale of common stock recorded0
2.	Dividend/Retained Earnings	$                                               30,000
	Cash		$             30,000
	(being dividend paid recorded)
3.	Cash	$                                               25,000
	Note Payable		$             25,000
	(being loan taken recorded)
4.	Note Payable	$                                                 2,500
	Cash		$               2,500
	(Being principal amount paid)
5.	Interest Expense	$                                                 1,200
	Cash		$               1,200
	(being interest expense recorded in cash)