Question

This information relates to Sarasota Real Estate Agency. Oct. 1 Stockholders invest $31,580 in exchange for common stock of the corporation. 2 Hires an administrative assistant at an annual salary of $33,360. 3 Buys office furniture for $3,650, on account. 6 Sells a house and lot for E. C. Roads; commissions due from Roads, $11,680 (not paid by Roads at this time). 10 Receives cash of $135 as commission for acting as rental agent renting an apartment. 27 Pays $610 on account for the office furniture purchased on October 3. 30 Pays the administrative assistant $2,780 in salary for October. Prepare the debit-credit analysis for each transaction. (If there is no transaction, then enter No Effect for the account and for the amount.) Oct. 1 Debits Debit Cash 31,580 Credits Credit Common Stock 31,580

Answer 1

Oct. 1	Debits	Increases assets
	Debit	Cash	31,580
	Credits	Increases stockholders' equity
	Credit	Common stock	31,580
Oct. 2	Debits	No effect
	Debit	No effect
	Credits	No effect
	Credit	No effect
Oct. 3	Debits	Increases assets
	Debit	Office furniture	3,650
	Credits	Increases liabilities
	Credit	Accounts payable	3,650
Oct. 6	Debits	Increases assets
	Debit	Accounts receivable	11,680
	Credits	Increases stockholders' equity (or) Increases retained earnings
	Credit	Service revenue	11,680
Oct. 10	Debits	Increases assets
	Debit	Cash	135
	Credits	Increases stockholders' equity (or) Increases retained earnings
	Credit	Service revenue	135
Oct. 27	Debits	Decreases liabilities
	Debit	Accounts payable	610
	Credits	Decreases assets
	Credit	Cash	610
Oct. 30	Debits	Decreases stockholders' equity (or) Decreases retained earnings
	Debit	Salaries and wages expense	2,780
	Credits	Decreases assets
	Credit	Cash	2,780