Question

Create a post about the accounting equation, elements and effects on elements through a increase or decrease. Requirement 1: Place your name in the post title, Requirement 2: State the accounting equation and which accounting element or elements the post will concentrate on. Requirement 3: Give an example of a journal entry and specify effect on each element. need help creation another post please

Example

The accounting equation is Assets = Liability + Owner's Equity

I will concentrate the following accounting elements in this posts. Liability and Owner's Equity (specifically Rent Expense).

A business transaction affecting the accounting equation is one which the company has take a loan from a bank of $4,000 to pay for the rent of the store. First thing to do is to credit Accounts Payable which is part of the Liabilities element for $4,000. That's the money we owe the bank. The second part is to debit Rent Expense for $4,000 which is part of the Owner's Equity element of the equation.

Rent Expense DR $4,000
Accounts Payable CR $4,000

This will remain like this until the company pays the bank the borrowed money. When this happens, Accounts Payable will be debited for $4,000, and Cash will be credited by $4,000.

Acc. Pay. DR $4,000
Cash CR $4,000