Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions. External Transaction Accounts Debit Credit 1. Owners invest $7,000 in the company and receive common stock. Common Stock 7,000 Cash 7,000 2. Receive cash of $2,400 for services provided in the current period. Cash 2,400 Service Revenue 2,400 3. Purchase office supplies on account, $140. Supplies 140 Cash 140 4. Pay $440 for next month's rent. Rent Expense 440 Cash 440 5. Purchase office equipment with cash of $1,400. Cash 1,400 Equipment 1,400 1. Assess whether the proposed entries are correct or incorrect. 1. 2. 3. 4. 5.
Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions. External Transaction Accounts Debit Credit 1. Owners invest $7,000 in the company and receive common stock. Common Stock 7,000 Cash 7,000 2. Receive cash of $2,400 for services provided in the current period. Cash 2,400 Service Revenue 2,400 3. Purchase office supplies on account, $140. Supplies 140 Cash 140 4. Pay $440 for next month's rent. Rent Expense 440 Cash 440 5. Purchase office equipment with cash of $1,400. Cash 1,400 Equipment 1,400 1. Assess whether the proposed entries are correct or incorrect. 1. 2. 3. 4. 5.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions.
| External Transaction | Accounts | Debit | Credit | |
| 1. | Owners invest $7,000 in the company and receive common stock. | Common Stock | 7,000 | |
| Cash | 7,000 | |||
| 2. | Receive cash of $2,400 for services provided in the current period. | Cash | 2,400 | |
| Service Revenue | 2,400 | |||
| 3. | Purchase office supplies on account, $140. | Supplies | 140 | |
| Cash | 140 | |||
| 4. | Pay $440 for next month's rent. | Rent Expense | 440 | |
| Cash | 440 | |||
| 5. | Purchase office equipment with cash of $1,400. | Cash | 1,400 | |
| Equipment | 1,400 |
1. Assess whether the proposed entries are correct or incorrect.
1.
2.
3.
4.
5.
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