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Bearcat Construction begins operations in March and has the following transactions:

March 1 Issue common stock for $11,500.
March 5 Obtain $7,100 loan from the bank by signing a note.
March 10 Purchase construction equipment for $15,500 cash.
March 15 Purchase advertising for the current month for $1,100 cash.
March 22 Provide construction services for $16,100 on account.
March 27 Receive $11,100 cash on account from March 22 services.
March 28 Pay salaries for the current month of $4,100.
Required:
Record each transaction. The company uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, enter "No Journal Entry Required" in the first account field.)

1 Answer

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Answer:

March 1 Issue common stock for $11,500.

Debt Cash account $11,500

Credit Common stock $11,500

Being entries to record the receipt of cash from the issuance of stock

March 5 Obtain $7,100 loan from the bank by signing a note.

Debit Cash account $7,100

Credit Note payable $7,100

Being entries to record loan from bank

March 10 Purchase construction equipment for $15,500 cash.

Debit Fixed assets $15,500

Credit Cash account $15,500

Being entries to record the purchase of equipment

March 15 Purchase advertising for the current month for $1,100 cash.

Debit Advertising expense $1,100

Credit Cash account $1,100

Being entries to record advertising expense for the month

March 22 Provide construction services for $16,100 on account.

Debit Accounts receivable $16,100

Credit Service Revenue $16,100

Being entries to record the revenue from construction services

March 27 Receive $11,100 cash on account from March 22 services.

Debit Cash accounts $11,100

Credit Accounts receivable $11,100

Being entries to record cash collected

March 28 Pay salaries for the current month of $4,100.

Debit Salaries expense $4,100

Credit Cash account $4,100

Being entries to record salaries expense paid.

Step-by-step explanation:

Assets are debited when there there is an increase. The same also applies to expense. Increase in liabilities, common stock and income are accounted for by posting a credit entry to the account affected.

When assets decrease, credit entries are posted to it. The same also applies to expense. while debits to liabilities, equity and income is for a decrease in the account.

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