Question

Date	Accounts involved in transaction?	Classification of the account?	Increasing or Decreasing?	Debit or Credit the Account?	Amount?
July 2	Received $14,000 (cash) contribution from Brett Lawrence, owner, in exchange for capital.
	Tell me what happen to the business today in your own words?
	Example: The business got cash from the owner.
	Cash	Asset	Increasing	Debit	$          12,000
	London, Capital	Capital	Increasing	Credit	$          12,000
July 4	Paid (cash) for utilities expense of $370.
July 5	Purchased equipment on account, $1,600.
July 10	Performed services for a client on account, $2,900.
July 12	Borrowed $7,100 cash, signing a notes payable.
July 19	The owner, Brett London, withdrew $200 cash from the business.
	Practice this transaction. It will appear in almost every problem.
	London, Withdrawals*	Contra Capital	Increasing	Debit	$200
	Cash	Asset	Decreasing	Credit	$200
	*Withdrawals in called a "Contra Capital" Account. A "Contra" account has its balance
	on the opposite side of the account it is associated with.
	Therefore, Withdrawals has a "normal debit balance." The account increases on the
	debit side and decreases on the credit side. Memorize this exception to the rule.
July 21	Purchased office supplies for $840 and paid cash.
July 27	Paid (cash) for the liability from July 5.

Answer 1

Date	Accounts involved	Account classification	Increasing/Decreasing	Debit/Credit	Amount
July 4	Utilities expense	Expense	Increasing	Debit	370
	Cash	Asset	Decreasing	Credit	370
July 5	Equipment	Asset	Increasing	Debit	1,600
	Accounts payable	Liability	Increasing	Credit	1,600
July 10	Accounts receivable	Asset	Increasing	Debit	2,900
	Service revenue	Revenue	Increasing	Credit	2,900
July 12	Cash	Asset	Increasing	Debit	7,100
	Note payable	Liability	Increasing	Credit	7,100
July 21	Supplies	Expense	Increasing	Debit	840
	Cash	Asset	Decreasing	Credit	840
July 27	Accounts payable	Liability	Decreasing	Debit	1,600
	Cash	Asset	Decreasing	Credit	1,600

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