Question

The following transactions occurred at several different businesses and are not related.

Post the following transactions into the appropriate T accounts.

Transactions:

Hunter Thompson, an owner, made an additional investment of $21,000 in cash.

A firm purchased equipment for $10,000 in cash.

A firm sold some surplus office furniture for $1,700 in cash.

A firm purchased a computer for $3,700, to be paid in 60 days.

A firm purchased office equipment for $11,200 on credit. The amount is due in 60 days.

Nancy Fowler, owner of Fowler Travel Agency, withdrew $6,000 of her original cash investment.

A firm bought a delivery truck for $37,000 on credit; payment is due in 90 days.

A firm issued a check for $3,500 to a supplier in partial payment of an open account balance.

Analyze:
Select the transactions that directly affected an owner’s equity account. T accounts normally do not have any minus signs. Use minus signs in this problem to demonstrate your understanding of decreases to account balances.

Post the following transactions into the appropriate T accounts. (Select the Debit account first, then the Credit account. Deductions to account balances should be indicated by a minus sign.)

1. Hunter Thompson, an owner, made an additional investment of $21,000 in cash. 2. A firm purchased equipment for $10,000 in cash. 3. A firm sold some surplus office furniture for $1,700 in cash. 4. A firm purchased a computer for $3,700, to be paid in 60 days. 5. A firm purchased office equipment for $11,200 on credit. The amount is due in 60 days. 6. Nancy Fowler, owner of Fowler Travel Agency, withdrew $6,000 of her original cash investment. 7. A firm bought a delivery truck for $37,000 on credit; payment is due in 90 days. 8. A firm issued a check for $3,500 to a supplier in partial payment of an open account balance.

Answer 1

1. Hunter Thompson, an owner, made an additional investment of $21,000 in cash.
Cash			Hunter Thompson, Capital
21,000				21,000

Journal entry

Account titles and explanation	debit	credit
Cash	21,000
Hunter Thompson, Capital		21,000

2. A firm purchased equipment for $10,000 in cash.
Equipment			Cash
10,000				.10,000

Journal entry

Account titles and explanation	debit	credit
Equipment	10,000
Cash		10,000

3. A firm sold some surplus office furniture for $1,700 in cash.
Cash			Office furniture
1,700				1,700

Journal entry

Account titles and explanation	debit	credit
Cash	1,700
Office furniture		1,700

4. A firm purchased a computer for $3,700, to be paid in 60 days.
Office Equipment			Accounts Payable
3,700				3,700

Journal entry

Account titles and explanation	debit	credit
Office Equipment	3,700
Accounts Payable		3,700

5. A firm purchased office equipment for $11,200 on credit. The amount is due in 60 days.
Office Equipment			Accounts Payable
11,200				11,200

Journal entry

Account titles and explanation	debit	credit
Office Equipment	11,200
Accounts Payable		11,200

6. Nancy Fowler, owner of Fowler Travel Agency, withdrew $6,000 of her original cash investment.
Nancy Fowler, Drawing			Cash
6,000				6,000

Journal entry

Account titles and explanation	debit	credit
Nancy Fowler, Drawing	6,000
cash		6,000

7. A firm bought a delivery truck for $37,000 on credit; payment is due in 90 days.
Delivery truck			Accounts payable
37,000				37,000

Journal entry

Account titles and explanation	debit	credit
Delivery truck	37,000
Accounts payable		37,000

8. A firm issued a check for $3,500 to a supplier in partial payment of an open account balance. Accounts payable Cash 3,500 3,500

Journal entry

Account titles and explanation	debit	credit
Accounts payable	3,500
Cash		3,500