Question

Derrick Wells decided to start a dental practice. The first five transactions for the business follow.  

1. Derrick invested $79,000 cash in the business.
2. Paid $19,000 in cash for equipment.
3. Performed services for cash amounting to $7,900.
4. Paid $2,700 in cash for advertising expense.
5. Paid $1,900 in cash for supplies.

(1) Select which two accounts are affected in each of the above transactions.
(2&3) Post the above transactions into the appropriate T accounts.

Select which two accounts are affected in each of the above transactions.

Transactions	Debit	Credit
Transaction 1
Transaction 2
Transaction 3
Transaction 4
Transaction 5

• Post the above transactions into the appropriate T accounts.

  Cash					Equipment
  					Bal.	0
  Bal.	0
  Fees Income					Advertising Expense
  Bal.	0				Bal.		0
  Supplies					Derrick Wells, Capital
  Bal.		0			Bal.	0

Answer 1

Select which two accounts are affected in each of the above transactions.

	Transactions Debit Credit Transaction 1 Cash Owner's equity Transaction 2 Equipment Cash Transaction 3 Cash Service revenue Transaction 4 Advertising expense Cash Transaction 5 Supplies Cash

Post the above transactions into the appropriate T accounts.

	Cash Equipment 1) 79000 2) 19000               2) 19000 3) 7900 4) 2700 5) 1900 Bal. 19000 Bal. 63300 Fees Income Advertising Expense 3) 7900 4) 2700 Bal. 7900 Bal. 2700 0 Supplies Derrick Wells, Capital 5) 1900 1) 79000 Bal. 1900 Bal. 79000