Question

CHAPTER 2 Analyzing and Recording Transactions a. On August 1. purchased an IKEA bed for $400 cash. b. On August 7, discussed the prices of staying at CityBnB with a customer over the phone. c. On August 13, rented a room to a family and billed them $600 on credit. d. On August 14, purchased and used cleaning services for $300 on credit. e. On August 31, invested $25,000 cash into the business. Required for each transaction, complete the analysis and determine the journal entry analysis. Use the template below. The first transaction has been completed for you. Analysis Journal entry analysis Assets increase. Assets decrease. Debit the furniture account for $400. Credit the cash account for $400.

Answer 1

a.	Analysis	Assets increases. Assets decreases
	Journal entry analysis	Debit the furniture account for $400 Credit the cash account for $400
b.	Analysis	No transaction required
	Journal entry analysis
c.	Analysis	Assets increases. Equity increases
	Journal entry analysis	Debit the Accounts Receivable account for $600 Credit the Revenue account for $600.
d.	Analysis	Liabilities increase. Equity decreases.
	Journal entry analysis	Debit the Cleaning Expense account for $300. Credit the Accounts Payable account for $300.
e.	Analysis	Assets increase. Equity increases.
	Journal entry analysis	Debit the Cash account for $25,000. Credit Common Shares for $25,000.