Answer
May 1 Cash............................................................................... 3,000
Common Stock.................................................. 3,000
3 Equipment.................................................................... 1,100
Accounts Payable............................................. 1,100
13 Rent Expense.............................................................. 400
Cash....................................................................... 400
21 Accounts Receivable................................................ 500
Service Revenue................................................ 500
Work Step by Step
1. You debit the cash account for money received and credit the common stock account for stock issued in return (worth the same as cash received).
3. Debit Equipment account (receive) and credit accounts payable (recognize debt).
13. Debit rent expense account (a reduction in rent payable) and credit cash account (cash used).
21. Debit accounts receivable and credit service revenue .
