Chapter 16, Problem 16.5AP

(a)

To determine

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: Journal entries.

(b)

To determine

To prepare: T account of stock investment.

(c)

To determine

To prepare: adjustment entry.

(d)

To determine

To prepare: balance sheet.