EXERCISE 1 Dr. Claret opened a veterinary clinic on August 1, 2021. The following are the business transactions for August. Aug. 1 Aug. 4 Dr. Claret invested 280,000 cash in the business in exchange for 1,000 shares of capital stock. Land and a building were purchased for 400,000. Of this amount, 60,000 applied to the land and 340,000 to the building. A cash payment of 80,000 was made at the time of the purchase, and a note payable was issued for the remaining balance. Aug. 9 Aug. 16 Medical instruments were purchased for 75,000 cash. Office fixtures and equipment were purchased for 25,000. Dr. Claret paid 10,000 at the time of purchase and agreed to pay the entire remaining balance in 15 days. Aug. 21 Aug. 24 days). Aug. 27 Office supplies expected to last several months were purchased for 4,200 cash. Dr. Claret billed patients 13,000 for services rendered. Of this amount, 1,000 was received in cash, and 12,000 was billed on account (due in 30 Aug. 28 Aug. 31 Received a 500 payment on the 12,000 account receivable recorded August 24. Paid employees 2,200 for salaries earned in August. A partial list of account titles used by Dr. Claret includes the following. A 450 invoice was received for several newspaper advertisements placed in August. The entire amount is due on September 8. Cash Office Fixtures and Equipment Accounts Receivable Land Office Supplies Notes Payable Accounts Payable Capital Stock Instructions: Building Service Revenue Advertising Expense Salary Expense (1) Prepare journal entries (including explanations) for each transaction. (20 points) (2) Post each transaction to the appropriate ledger accounts, using the T account format. (20 points) (3) Prepare a trial balance dated August 31, 2021. (10 points) (4) Discuss the role of accounting records in an organization. (5 points) (5) Explain how balance sheet accounts are increased or decreased. (5 points) (6) Explain the double-entry system of accounting. (5 points) (7) Explain the realization and matching principles in recording revenue and expenses. (5 points)