E2-7 Rowand Enterprises had the following selected transactions.

1. Aaron Rowand invested $4,000 cash in the business in exchange for common stock.

2. Paid office rent of $1,100.

3. Performed consulting services and billed a client $5,200.

4. Paid a $700 cash dividend.

Instructions

(a) Indicate the effect each transaction has on the basic accounting equation

(Assets = Liabilities + Stockholders’ Equity), using plus and minus signs.

(b) Journalize each transaction.

E2-8 Josie Feeney has prepared the following list of statements about the general ledger.

1. The general ledger contains all the asset and liability accounts, but no stockholders’ equity accounts.

2. The general ledger is sometimes referred to as simply the ledger.

3. The accounts in the general ledger are arranged in alphabetical order.

4. Each account in the general ledger is numbered for easier identification.

5. The general ledger is a book of original entry.

Instructions Identify each statement as true or false. If false, indicate how to correct the statement.