Question

Current Attempt in Progress Selected transactions for Cullumber Corporation during September 2018, its first month in business, are presented below: Sept. 1 Issued common shares in exchange for $18,000 cash. 2 Paid $1,300 cash for rent for the month of September. 5 Purchased equipment for $9,700, paying $2,000 in cash and the balance on account. 8 Earned $6,900 in revenue, receiving $1,100 cash and $5,800 on account of services provided. 12 Incurred $500 in advertising expense on account. 20 Paid $3,000 for repairs and maintenance expenses. 25 Paid $4,900 cash on balance owed for equipment. 27 Incurred and paid income taxes for the month amounting to $1,000. 30 Declared and paid a $600 cash dividend.

Answer 1

Date Account titles and explanation Debit Credit $ 18,000 01-Sep-18 Cash Common Stock ( Cash received in exchange of shares ) $ 18,000 $ 1,300 $ 1,300 02-Sep-18 Prepaid Rent Cash (Rent paid in advance for the month of September 2018 ) $ 9,700 05-Sep-18 Equipment Cash Accounts Payable (Purchase of equipment recorded) $ $ 2,000 7,700 $ $ 1,100 5,800 08-Sep-18 Cash Accounts Receivable Service Income ( Income earned from the services provided) $ 6,900

500 12-Sep-18 Advertising expenses Accounts Payable Advertising expenses recorded) $ 500 $ 3,000 $ 3,000 20-Sep-19 Repaird and Maintenance expenses Cash (Cash paid for the repirs and maintenance expenses incurred.) $ 4,900 $ 4,900 25-Sep-18 Accounts Payable Cash (Cash paid towards the equipment purchased on account) $ 1,000 27-Sep-18 Income Tax expense Cash (Income tax expenses paid ) $ 1,000 $ 600 30-Sep-18 Dividend Cash (Payment of cash dividend recorded) $ 600