Question

2-2 Selected transactions for L. Takemoto, an interior decorating firm, in its first month of business, are as follows. Jan. 2 Invested $15,000 cash in the business in exchange for common stock. 3 Purchased used car for $8,200 cash for use in the business. 9 Purchased supplies on account for $500 11. Billed customers $1,800 for services performed 16 Paid $200 cash for advertising 20 Received $780 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed 28 Declared and paid a $500 cash dividend. For each transaction, indicate the following (a) The basic type of account debited and credited (Asset, Liability, Stockholders' Equity). (b) The speofic account debited and credited (Cash, Rent Expense, Service Revenue, etc.) (c) Whether the specific account is increased or decreased. d) The normal balance of the specific account. Specific AccountEffect Normal Balance Jan. 2

Selected transactions for L. Takemoto, an interior decorating firm, in its first month of business, are as follows.

Jan. 2		Invested $15,000 cash in the business in exchange for common stock.
3		Purchased used car for $8,200 cash for use in the business.
9		Purchased supplies on account for $500.
11		Billed customers $1,800 for services performed.
16		Paid $200 cash for advertising.
20		Received $780 cash from customers billed on January 11.
23		Paid creditor $300 cash on balance owed.
28		Declared and paid a $500 cash dividend.

For each transaction, indicate the following.

(a)		The basic type of account debited and credited (Asset, Liability, Stockholders’ Equity).
(b)		The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.).
(c)		Whether the specific account is increased or decreased.
(d)		The normal balance of the specific account.

Answer 1