BE2.5

Indicate basic and debit-credit analysis. (LO 2)

Bombeck Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis illustrated of the textbook.

Aug. 1	Opens an office as a financial advisor, investing $5,000 in cash in exchange for common stock.
4	Pays insurance in advance for 6 months, $1,800 cash.
16	Receives $1,900 from clients for services performed.
27	Pays secretary $1,000 salary.