Question

This information relates to Pickert Real Estate Agency.

Oct. 1 Stockholders invested $30,000 in exchange for common stock of the corporation.
Oct. 2 Hires an administrative assistant at an annual salary of $42,000.
Oct. 3 Buys office furniture for $4,600, on account.
Oct. 6 Sells a house and lot for M.E. Petty; commissions due from Petty, $10,800 (not paid by Petty at this time).
Oct. 10 Receives cash of $140 as commission for acting as rental agent renting an apartment.
Oct. 27 Pays $700 on account for the office furniture purchased on October 3.
Oct. 30 Pays the administrative assistant $3,500 in salary for October.

Prepare the debit-credit analysis for each transaction. (If there is no transaction, then enter no effect for the account and 0 for the amount.)

Oct. 1 Debits increase assets:
debit Cash $ 30000
Credits increase stockholders' equity:
credit Common stock $ 30000

Oct. 2 Debits increase no effect:
debit___ $______
Credits increase ______
credit ____$_______

Oct 3 Debits increase assets:
debit ______ $ 4600
Credits increase liabilities:
credit Accounts payable $ 4600 .

Oct. 6 Debits increase :_____
debit ____ $_____
Credits increase :____
credit ___ $____

Oct. 10 Debits increase assets:
debit ___ Cash $ 140
Credits increase ____
credit ____ $____

Oct 27 Debits decrease :_____
debit_____ $____
Credits decrease :___
credit____ $.____

Oct 30 Debits increase :____
debit ____ $____
Credits decrease :_____
credit ___ $.____

Answer 1

The debit-credit analysis for each transaction is given below.

Oct. 1 Stockholders invested $30,000 in exchange for common stock of the corporation.

No effect (it is purchase of share already issued on stock exchange)

Oct. 2 Hires an administrative assistant at an annual salary of $42,000.

No effect (As hiring is not a transaction)

Oct. 3 Buys office furniture for $4,600, on account.

Debit Furniture Asset $ 4,600

Credit Account Payable $ 4,600

Oct. 6 Sells a house and lot for M.E. Petty; commissions due from Petty, $10,800 (not paid by Petty at this time).

Debit Commision Receivable $ 10,800

Credit Commission Income $ 10,800

Oct. 10 Receives cash of $140 as commission for acting as rental agent renting an apartment.

Debit Cash Asset $ 140

Credit Rental Commission Income $ 140

Oct. 27 Pays $700 on account for the office furniture purchased on October 3.

Debit Account Payabe $ 700

Credit Cash $ 700

Oct. 30 Pays the administrative assistant $3,500 in salary for October.

Debit Salary Expense $ 3,500

Credit Cash $ 3,500