Question

This information relates to Sarasota Real Estate Agency.
Oct. 1 Stockholders invest $31,580 in exchange for common stock of the
corporation.
2 Hires an administrative assistant at an annual salary of $33,360.
3 Buys office furniture for $3,650, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads,
$11,680 (not paid by Roads at this time).
10 Receives cash of $135 as commission for acting as rental agent renting an
apartment.
27 Pays $610 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,780 in salary for October.
Prepare the debit-credit analysis for each transaction.
Oct. 1 Debits
Debit Cash 31,580
Credits
Credit Common Stock 31,580
Oct. 2 Debits No Effect
Debit No Effect
Credits No Effect
Credit No Effect
Oct. 3 Debits
Debit
Credits
Credit Accounts Payable $3,650
Oct. 6 Debits
Debit Accounts Receivable $11,680
Credits Credit 11,680
Oct. 10 Debits
Debit Cash 135
Credits Credit 135
Oct. 27 Debits
Debit Accounts Payable 610
Credits
Credit Cash 610
Oct. 30 Debits
Debit Salaries and Wages
Expense 2,780
Credits
Credit Cash $2,780

Answer 1

Answer:

Oct 1.

Dr Cash 31,580

Cr Common Stock 31,580

Oct. 2

Dr No entry

Cr No entry

Oct. 3

Dr Office furniture 3,650

Cr Accounts payable 3,650

Oct. 6

Dr Accounts receivable 11,680

Cr Service revenue 11,680

Oct. 10

Dr Cash 135

Cr Service revenue 135

Oct. 27

Dr Accounts payable 610

Cr Cash 610

Oct. 30

Dr Salaries and wages expense 2,780

Cr Cash 2,780

Explanation:

Preparation of the debit-credit analysis for each transaction.

Oct. 1

Debits Increases assets

Debit Cash 31,580

Credits Increases stockholders' equity

Credit Common stock 31,580

Oct. 2

Debits No effect

Debit No effect

Credits No effect

Credit No effect

Oct. 3

Debits Increases assets

Debit Office furniture 3,650

Credits Increases liabilities

Credit Accounts payable 3,650

Oct. 6

Debits Increases assets

Debit Accounts receivable 11,680

Credits Increases retained earnings

Credit Service revenue 11,680

Oct. 10

Debits Increases assets

Debit Cash 135

Credits Increases retained earnings

Credit Service revenue 135

Oct. 27

Debits Decreases liabilities

Debit Accounts payable 610

Credits Decreases assets

Credit Cash 610

Oct. 30

Debits Decreases retained earnings

Debit Salaries and wages expense 2,780

Credits Decreases assets

Credit Cash 2,780