1.

For each of the following accounts, indicate the effects of (a) a debit and (b) the normal account balance.

1. Notes Payable

2. Prepaid Insurance

3. Salaries and Wages Expense

4. Service Revenue

5. Equipment

6. Share Capital-Ordinary

2.

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.

1. The company issues ordinary shares in exchange for 25,000 cash.

2. Purchased 400 of supplies on credit.

3. Purchased equipment for 10,000, paying 3,000 in cash and signed a 30-day, 7,000, note payable.

4. Real estate commissions billed to clients amount to 4,000.

5. Paid 700 in cash for the current month's rent.

6. Paid 200 cash on account for supplies purchased in transaction 2.

7. Received a bill for 600 for advertising for the current month.

8. Paid 2,200 cash for salaries.

9. The company paid dividends of 1,200.

10. Received a check for 3,000 from a client in payment on account for commissions billed in transaction 4.

3.

Post the following transactions to T-accounts and determine each account's ending balance.

1. Supplies............................................................................................. 2,000

Accounts Payable..................................................................... 2,000

2. Accounts Receivable......................................................................... 4,000

Service Revenue....................................................................... 4,000

3. Cash 3,500

Accounts Receivable 3,500

4. Accounts Payable 1,000

Cash 1,000