Chapter 2, Problem 2.18AE

LO 3

(Learning Objective 3: Analyze the impact of business transactions on accounts) Set up the following T-accounts: Cash. Accounts Receivable. Office Supplies. Office Furniture. Accounts Payable. Common Stock, Dividends, Service Revenue. Salary Expense, and Rent Expense. Record the following transactions directly in the T-accounts without using a journal. Use the letters to identify the transactions. Determine the ending balance in each account.

1. a. Brian Durham opened a law firm by investing $25,500 cash and office furniture with fair value of $9,400 Organized as a professional corporation, the business issued common stock to Durham.
2. b. Paid monthly rent of $1.500.
3. c. Purchased office supplies on account. $700
4. d. Paid employees’ salaries of $2,900.
5. e. Paid $250 of the account payable created in transaction c.
6. f. Performed legal service on account, $11,000.
7. g. Declared and paid dividends of $2,000.