Question

Pharoah Company had the following transactions:

1. borrowed $6,572 from the bank by signing a note

2. paid $3,286 cash for a computer

3. purchased $591 of supplies on account

(a) create a debit analysis and credit analysis columns and indicate what accountd afe increased and decreased by each transaction.

(b) journalize each transaction.

Answer 1

Transaction	Debit-Credit analysis
1	Debits - Increase Assets - Cash - $6,572
	Credits - Increase Liabilities - Notes Payable - $6,572
2	Debits - Increase Assets - Equipment/Computer - $3,286
	Credits - Decrease Assets - Cash - $3,286
3	Debits - Increase Assets - Supplies - $591
	Credits - Increase Liabilities - Accounts Payable - $591
Transaction	Account titles and explanation		Debit(in $)	Credit(in $)
1	Cash		6572
	Notes Payable			6572
	(to amount borrowed by issuing note)
2	Equipment/Computer		3286
	Cash			3286
	(to computer purchased by cash)
3	Supplies		591
	Accounts Payable			591
	(to supplies purchased on account)