Question

Selected transactions for Oriole Corporation during September 2018, its first month in business, are presented below:

Sept.	1		Issued common shares in exchange for $21,000 cash.
	2		Paid $1,400 cash for rent for the month of September.
	5		Purchased equipment for $10,500, paying $2,100 in cash and the balance on account.
	8		Earned $7,200 in revenue, receiving $1,000 cash and $6,200 on account of services provided.
	12		Incurred $600 in advertising expense on account.
	20		Paid $3,300 for repairs and maintenance expenses.
	25		Paid $5,300 cash on balance owed for equipment.
	27		Incurred and paid income taxes for the month amounting to $800.
	30		Declared and paid a $400 cash dividend.

Prepare journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Basic account type	Increase	Decrease	Specific accounts in the question
Assets	Debit	Credit	Accounts receivable, Equipment, Prepaid rent, Cash
				Liabilities	Credit	Debit	Accounts payable
Capital	Credit	Debit	Common stock
				Income	Credit	Debit	Service revenue
Expense	Debit	Credit	Advertising expense, Income tax expense, Repairs and maintenance expenses

• When a transaction is on account, it means the amount is not paid and a liability needs to be recorded.