acty2100 Cycle_1_E_Mail

acty2100 Cycle_1_E_Mail - ACCOUNTING CYCLE PROBLEM Part I...

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ACCOUNTING CYCLE PROBLEM Part I Spring 2006 A. Journal Entries Nov. 1 Cash 50,000 Capital Stock 50,000 Cash, an asset, increases and Capital Stock, OE, increases. 2 Prepaid Rent 5,400 Cash 5,400 Prepaid Rent, asset, increases--it's ours until it's used up. Cash decreases. Problem tells you which account to debit. 6 Supplies 900 Accounts Payable 900 Supplies, asset, increases, A/P, liability, increases. No cash paid at this time. 16 Accounts Payable 900 Cash 900 Debt incurred on Nov 5 now being paid. A/P, liability, decreases and Cash, asset, decreases 30 Accounts Receivable 7,200 Cleaning Service Revenue 7,200 We've earned revenue but it hasn't been collected. A/R, asset, increases and the revenue increases. It's a service revenue because a service was given. Sales is used when products are sold. Dec. 1 Cash 16,500 Notes Payable 16,500 To issue a note means to borrow money. Cash, asset, increases and N/P, liability increases. It's a note because banks will make you sign. And usually it's you borrowing from the bank,
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This note was uploaded on 04/02/2008 for the course ACTY 2100 taught by Professor Hetzel during the Spring '08 term at Western Michigan.

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acty2100 Cycle_1_E_Mail - ACCOUNTING CYCLE PROBLEM Part I...

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