Question

Problem #2 A company has the following transactions during June: June 2 Provide services to customers for cash, $4,300 June 8 Purchase office supplies on account, $1,000 June 11 Pay workers' salaries for the current period, $1,400 June 15 Issue additional shares of common stock, $6,000 June 28 Pay one-half of the amount owed for supplies purchased on June 8, $500 Required: For each transaction, identify (1) the two accounts involved, (2) the type of account, (3) whether the transaction increases or decreases the account balance, and (4) whether the increase or decrease would be recorded with a debit or credit.

Answer 1

	Accounts involved	Type of account	Effect on account	Debit or Credit
June. 2	Cash and service revenue	Cash - Asset, Service revenue - Equity	Cash - Increase, Service revenue - Increase	Cash - Debit, Service revenue - Credit
June 8	Supplies and Accounts payable	Supplies - Asset Accounts payable - Liability	Supplies - Increase, Accounts payable - Increase	Supplies -Debit, Accounts payable - Credit
June 11	Salaries expense and Cash	Salaries expense - Equity, Cash - Asset	Salaries expense - Increase, Cash - Decrease	Salaries expense - Debit, Cash - Credit
June 15	Cash and Common stock	Cash - Asset, Common stock - Equity	Cash - Increase, Common stock - Increase	Cash - Debit, Common stock - Credit
June 28	Accounts payable and Cash	Accounts payable - Liability, Cash -Asset	Accounts payable - Decrease, Cash - Decrease	Accounts payable - Debit, Cash - Credit