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External Transaction Accounts Debit Credit 1. Owners invest $15,000 in the Common Stock 15,000 company and receive common stock. 2. Receive cash of $4,000 for services provided in the current period. 3. Purchase office supplies on account, $300. Cash 15,000 Cash 4,000 Service Revenue 4,000 Supplies Cash 300 300 4. Pay $600 for next month's rent. Rent Expense 600 Cash 600 5. Purchase office equipment with cash of $2,200. Cash 2,200 Equipment 2,200

External Transaction Accounts Debit Credit 1. Owners invest $15,000 in the Common Stock 15,000 company and receive common stock. 2. Receive cash of $4,000 for services provided in the current period. 3. Purchase office supplies on account, $300. Cash 15,000 Cash 4,000 Service Revenue 4,000 Supplies Cash 300 300 4. Pay $600 for next month's rent. Rent Expense 600 Cash 600 5. Purchase office equipment with cash of $2,200. Cash 2,200 Equipment 2,200

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions.

Required:
Assess whether the junior accountant correctly proposes how to record each transaction. If incorrect, provide the correction.

External Transaction Accounts Debit Credit 1. Owners invest $15,000 in the Common Stock 15,000 company and receive common stock. 2. Receive cash of $4,000 for services provided in the current period. 3. Purchase office supplies on account, $300. Cash 15,000 Cash 4,000 Service Revenue 4,000 Supplies Cash 300 300 4. Pay $600 for next month's rent. Rent Expense 600 Cash 600 5. Purchase office equipment with cash of $2,200. Cash 2,200 Equipment 2,200
Transcribed Image Text:External Transaction Accounts Debit Credit 1. Owners invest $15,000 in the Common Stock 15,000 company and receive common stock. 2. Receive cash of $4,000 for services provided in the current period. 3. Purchase office supplies on account, $300. Cash 15,000 Cash 4,000 Service Revenue 4,000 Supplies Cash 300 300 4. Pay $600 for next month's rent. Rent Expense 600 Cash 600 5. Purchase office equipment with cash of $2,200. Cash 2,200 Equipment 2,200
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