Transaction type and debit/credit terminology
The following events apply to Mask Enterprises.
1. Acquired $25,000 cash from the issue of common stock.
2. Paid salaries to employees, $1,750 cash.
3. Collected $8,100 cash for services to be performed in the future.
4. Paid cash for utilities expense, $402.
5. Recognized $22,500 of service revenue on account.
6. Paid a $1,250 cash dividend to the stockholders.
7. Purchased $1,600 of supplies on account.
8. Received $6,250 cash for services rendered.
9. Paid cash to rent office space for the next 12 months, $6,000.
10. Paid cash of $8,750 for other operating expenses.
11. Paid on account payable, $876.
12. Recognized $1,500 of rent expense. Cash had been paid in a prior transaction (see Event 9).
13. Recognized $2,500 of revenue for services performed. Cash had been previously collected (see Event 3).
14. Recognized $2,600 of accrued salaries expense.
15. Recognized $650 of accrued interest revenue.
Required
Identify each event as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also identify the account that is to be debited and the account that is to be credited when the transaction is recorded. The first event is recorded as an example.
Event No. | Type of Event | Account Debited | Account Credited |
1 | AS | Cash | Common Stock |
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