Expand Your Critical Thinking 3-07 (Part Level Submission) Sarah Morrow operates Blossom Riding Academy, Inc. The academy's primary sources of revenue are riding fees and lesson fees, which are provided on a cash basis. Sarah also boards horses for owners, who are billed monthly for boarding fees. In a few cases, boarders pay in advance of expected use. For its revenue transactions, the academy maintains these accounts: Cash, Accounts Receivable, Uneared Service Revenue, and Service Revenue. The academy owns 10 horses, a stable, a riding corral, riding equipment, and office equipment. These assets are accounted for in the following accounts: Horses, Buildings, and Ecuipment, The academy employs stable helpers and an office employee, who receive weekly salaries. At the end of each month, the mail usually brings bills for advertising, utilities, and veterinary service. Other expenses include feed for the horses and insurance for its expenses, the academy maintains the following accounts: Supplies, Prepaid Insurance, Accounts Payable, Salaries and Wages Expense, Advertising Expense, Utilities Expense, Maintenance and Repairs Expense, Supplies Expense, and Insurance Expense. Saran's sole source of personal Income is dividends from the academy. Thus, the corporation declares and pays perlodie dividends. To account for stockholders' equpy in the business and cividends, two accounts are maintained: Common Stock and Dividends. During the first month of operations, an inexperienced bookkeeper was employed. Sarah asks you to review the following eight entries of the 50 entries made during the month. In each case, the explanation for the entry is correct. May 1 Cash 18,000 Uneamed Service Revenue 18,000 (issued common stock in exchange for $18,000 cash) 5 Cash 300 Service Ravenue (Received $300 cash for lesson fees) Cash Service Revenue (Received 1600 for boarding of horses beginning Jure 1) Supplies Expense Cash 300 7 600 600 9 1,800 1.00