Question

The following information relates to Sheffield Real Estate Agency Oct. 1 James Sheffield begins business as a real estate agent with a cash investment of $21,750. 2. Hires an administrative assistant. 3 Purchases office furniture for $2,755, on account. 6 Sells a house and lot for C. Rouse; bills C. Rouse $5,220 for realty services performed. 27 Pays $1,595 on the balance related to the transaction of October 3. 30 Pays the administrative assistant $3,625 in salary for October

Answer 1

Ans:

Date	Affect on Accounting Equation				Affect on Account
Oct-01	Debit	Cash	Debit	Asset	$ 21,750
	Credit	James Sheffield, Capital	Credit	Equity	$ 21,750
Oct-02	Debit	No Entry	Debit
	Credit		Credit
Oct-03	Debit	Office Furniture	Debit	Assets	$ 2,755
	Credit	Accounts Payable	Credit	Liability	$ 2,755
Oct-06	Debit	Accounts receivables	Debit	Asset	$5,220
	Credit	Service Revenue	Credit	Equity [Revenue-Income Statement]	$5,220
Oct-27	Debit	Accounts Payable	Debit	Liability	$1,595
	Credit	Cash	Credit	Asset	$1,595
Oct-30	Debit	Salaries expense	Debit	Equity [Expense - Income Statement]	$3,625
	Credit	Cash	Credit	Asset	$ 3,625

Journal entries:
Date	Accounts title and explanations				Debit $	Credit $
1-Oct	Cash account				$21,750
	Capital account					$21,750
2-Oct	No entry
3-Oct	Office Furniture account				$2,755
	Accounts Payable					$2,755
6-Oct	Accounts receivable				$5,220
	Service Revenue					$5,220
27-Oct	Accounts Payable				$1,595
	Cash account					$1,595
30-Oct	Administrative Salaries				$3,625
	Cash account					$3,625