Problem

Effect of adjustments to cash on the accounting equationAfter reconciling its bank account...

Effect of adjustments to cash on the accounting equation

After reconciling its bank account. Hull Equipment Company made the following adjusting entries:

Entry No.	Account Titles	Debit	Credit
1	Cash	40
	Interest Revenue		40
	To record interest revenue
2	Accounts Receivable	250
	Cash		250
	To record NSF check from Wilson
3	Rent Expense	35
	Cash		35
	To correct understatement of expense
4	Service Charge Expense	15
	Cash		15
	To record bank service charge
5	Cash	175
	Accounts Receivable		175
	To record bank collection

Required

Identify the event depicted in each journal entry as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each entry affects the accounting equation by placing a + for increase, - for decrease, or NA for not affected under the following components of the accounting equation. The first event is recorded as an example.