Question

The following transactions occur for Cardinal Music Academy during the month of October: Provide music lessons to students for $10,500 cash. Purchase prepaid insurance to protect musical equipment over the next year for $4,000 cash. Purchase musical equipment for $17,000 cash. Obtain a loan from a bank by signing a note for $39,000. Record the transactions. (Omit the "$" sign in your response.)

Answer 1

Step-by-step explanation:

Provide music lessons to students for 10,500 cash.

Dr Cash 10,500

Cr Sales 10,500

Being cash sales made

Purchase prepaid insurance to protect musical equipment over the next year for $4,000 cash.

Dr Prepaid Insurance account 4,000

Cr Cash 4,000

Being payment for the prepaid insurance

Purchase musical equipment for $17,000 cash.

Dr Equipment (asset) account 17,000

CR Cash 17,000

Being purchase of equipment

Obtain a loan from a bank by signing a note for $39,000.

Dr Cash 39,000

Cr Loan note (liability) 39,000