Question

E2-4 Presented below is information related to Beijing Real Estate Agency Ltd.

Credit

Oct. 1

2 3 6

27 30

Lynn Robbins begins business as a real estate agent with a cash investment of ¥200,000 in exchange for ordinary shares.

Hires an administrative assistant.

Purchases office furniture for ¥19,000, on account.

Sells a house and lot for N. Fennig; bills N. Fennig ¥32,000 for realty services performed.

Pays ¥8,500 on the balance related to the transaction of October 3.

Pays the administrative assistant ¥25,000 in salary for October.

Journalize transactions.

(LO 4)

Analyze transactions and determine their effect on accounts.

(LO 2)

Journalize transactions.

(LO 4)

Analyze transactions and journalize.

(LO 2, 3, 4)

Analyze transactions and journalize.

(LO 2, 3, 4)

Analyze statements about the ledger.

(LO 5)

Instructions

Prepare the debit-credit analysis for each transaction as illustrated on pages 65–70. E2-5 Transaction data for Beijing Real Estate Agency Ltd. are presented in E2-4.

Instructions

Journalize the transactions. (You may omit explanations.) E2-6 Minsk Industries OAO had the following transactions.

1. Borrowed py 50,000 from the bank by signing a note. 2. Paid py 25,000 cash for a computer.

3. Purchased py 4,500 of supplies on account.

Answer 1

Answer:

Date	Accounts Title & Explanation	Debit ($)	Credit ($)	Debit & Credit Analysis
Oct 1	Cash	200,000		Debit Increases - Asset
	Common Stock		200,000	Credit increases - Stockholder's Equity
	(Being investment made in exchange of cash recorded)
Oct 2	No Entry
Oct 3	Office Furniture	19,000		Debit Increases - Asset
	Accounts Payable		19,000	Credit increases - Liabilities
	(Being Purchase of Office Furniture recorded)
Oct 6	Accounts Receivables	32,000		Debit Increases - Asset
	Service Revenue		32,000	Credit increases - Revenue
	(Being sales of house on Account recorded)
Oct 27	Accounts Payable	8,500		Debit Decreases - Liabilities
	Cash		8,500	Credit Decreases - Assets
	(Being payment made on suppliers Account recorded)
Oct 30	Salaries expenses	25,000		Debit Increases - Expenses
	Cash		25,000	Credit Decreases - Assets
	(Being Payment of Administrative salaries recorded)

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Journal entries

S no	Accounts Title & Explanation	Debit ($)	Credit ($)
1	Dr cash account	$50,000
	Cr notes payable account		$50,000
2	Dr computer account	$25,000
	Cr cash account		$25,000
3	Dr supplies account	$4,500
	Cr cash account		$4,500

Debit and credit analysis for each transaction:-

1) borrow money from bank by signing on note

Debit analysis - cash account has increased when you borrow money

Credit analysis - notes payable account has increased or liabilities has increased

2) paid cash for a computer

Debit analysis - computer account has increased means assets account has increased

Credit analysis - cash account has decreased  

3) purchased supplies for cash

Debit analysis - supplies account has increased

Credit analysis - cash account has decreased