Question

Terapin Company engages in the following external transactions for November.

1.Purchase equipment in exchange for cash of $22,500.

2.Provide services to customers and receive cash of $4,900.

3.Pay the current month's rent of $1,000.

4.Purchase office supplies on account for $1,800.

5. Pay employees' salaries of $1,200 for the current month

Record the transactions. Terapin uses the following accounts:

Cash, Supplies, Equipment, Accounts Payable, Service Revenue, Rent Expense, and Salaries Expense

Answer 1

Please see the explanation below:

Step-by-step explanation:

1.

Debit: Equipment $22,500

Credit: Cash $22,500

To record Purchase of Equipment.

2.

Debit: Cash $4,900

Credit: Service Revenue $4,900

To record Service Revenue.

3.

Debit: Rent Expense $1,000

Credit: Cash $1,000

To record Rent Expense.

4.

Debit: Supplies $1,800

Credit: Accounts Payable $1,800

To record purchase of Supplies on Account.

5.

Debit: Salaries Expense $1,200

Credit: Cash $1,200

To record Salaries Expense.

For T - Accounts, Please see the attached file.