Question

L. Lyons started a business, called Lyons Share, by investing $4,000 for stock. Illustrate how to record the transaction in Lyons Share's T-accounts by completing the following sentence. The Cash account would be blank input field 1_(debited/credited) on the blank input field 2(left/right) side of the T-account and the Common Stock account would be blank input field 3(debited/credited) on the blank input field 4 (left/right) side of the T-account. (Enter one word per blank.)

Answer 1

Dr Cash Account (Left side)

Cr Common stock (Credit side)

Step-by-step explanation:

Preparation of entry to Illustrate how to record the transaction in Lyons Share's T-accounts

Based on the information given how to record the transaction in Lyons Share's T-accounts will be :

The CASH ACCCOUNT would be DEBITED on the LEFT SIDE of the T-account reason been that debit side is often on the left hand side and Secondly the amount of 4,000 was the cash that was Invested for stock which is why cash Account will be debited.

COMMON STOCK account would be CREDITED on the RIGHT SIDE of the T-account reason been that the amount of 4,000 was Invested for stock which is why comm stock account will be credited.

Therefore entry to Illustrate how to record the transaction in Lyons Share's T-accounts will be:

Dr Cash Account (Left side)

Cr Common stock (Credit side)