Baycrest Cinema Company owns movie theatres. Baycrest Cinema engaged in the following transactions in November 2016:
Nov. 1 Darrell Palusky invested $350,000 personal cash in the business by depositing that amount in a bank account titled Baycrest Cinema Company. The business gave capital to Palusky.
1 Paid November's rent on a theatre building with cash, $6,000.
2 Paid $320,000 cash to purchase land for a theatre site.
5 Borrowed $220,000 from the bank to finance the first phase of construction of the new theatre. Palusky signed a note payable to the bank in the name of Baycrest Cinema Company.
10 Purchased theatre supplies on account, $1,000.
16 Paid employees' salaries of $2,900 cash.
22 Paid $600 on account.
28 Palusky withdrew $8,000 cash.
29 Paid property tax expense on the land for the new theatre, cash of $1,400.
30 Received $20,000 cash from service revenue and deposited that amount in the bank.
Baycrest uses the following accounts: Cash; Supplies; Land; Accounts Payable; Notes Payable; Darrell Palusky, Capital; Darrell Palusky, Withdrawals; Service Revenue; Property Tax Expense; Rent Expense; Salaries Expense.
Required
1. Prepare an analysis of each business transaction of Baycrest Cinema Company as shown for the November 1 transaction:
Nov. 1 The asset cash is increased. Increases in assets are recorded by debits; therefore, debit Cash. The owner's equity of the entity is increased. Increases in owner's equity are recorded by credits; therefore, credit Darrell Palusky, Capital.
2. Record each transaction in the journal with an explanation, using the account titles given. Identify each transaction by its date.