Selected transactions for Front Room, an interior decorator corporation, in its fi rst month of business, are as follows. LO9 1. Issued stock to investors for $15,000 in cash.

2. Purchased used car for $10,000 cash for use in business.

3. Purchased supplies on account for $300.

4. Billed customers $3,700 for services performed.

5. Paid $200 cash for advertising at the start of the business.

6. Received $1,100 cash from customers billed in transaction (4).

7. Paid creditor $300 cash on account.

8. Paid dividends of $400 cash to stockholders.

Instructions

(a) For each transaction indicate

(a) the basic type of account debited and credited (asset, liability, stockholders’ equity);

(b) the specifi c account debited and credited (Cash, Rent Expense, Service Revenue, etc.);

(c) whether the specifi c account is increased or decreased; and

(d) the normal balance of the specifi c account. Use the following format, in which transaction (1) is given as an example Account Debited Account Credited

(a)

(b)

(c)

(d)

(a)

(b)

(c) (d)
Trans- Basic Specific Normal Basic Specific Normal action Type Account Effect Balance Type Account Effect Balance 1 Asset Cash Increase Debit Stock- Common Increase Credit holders’ Stock equity

(b) Journalize the transactions. Do not provide explanations.