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1. Anne Able forms a corporation, opens a bank account in the name of the corporation, and deposits $20,000 of her personal funds into the
1. Anne Able forms a corporation, opens a bank account in the name of the corporation, and deposits $20,000 of her personal funds into the bank account. To record the event, the corporation should ... Credit Retained Earnings for $20,000,000 B Debit Capital Stock for $20,000 C Credit Cash for $20,000 D Credit Revenue for $20,000 E None of the above 2. On May 11, 20x4, A calendar year corporation borrows $100,000 from the Ajax Bank. Assume that the loan is for one year; that $100,000 plus interest must be repaid on May 11, 20x5: and that the annual interest rate is 6%. Assume also that the loan is evidenced by a note payable to the bank. To record the event of May 11, 20x4, the corporation should ... A Debit Notes Payable for $100,000 B Debit Cash for $106,000 C Credit Notes Payable for $100,000 D Credit Notes Payable for $106,000 E None of the above 3. A company purchases a machine at a cost of $70,000, paying cash in full. To record the purchase, the company should ... A Debit Machinery for $70,000 B Debit Cash for $70,000 Credit Notes Payable for $70,000 D Debit Depreciation Expense for $70,000 E None of the above 4. A company earns $6,000 of service revenue on account. To record the event, the company should ... A Debit Accounts Receivable for $6,000 B Credit Accounts Receivable for $6,000 D Credit Retained Earnings for $6,000 Credit Cash for $6,000 None of the above E 5. A company incurs and immediately pays $450 of advertising expense. To record the event, the company should ... A Debit Retained Earnings for $450 B Debit Accounts Payable for $450 Credit Advertising Expense for $450 D Debit Advertising Expense for $450 E None of the above
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