For each journal entry, identify whether each account is increasing or decreasing. Describe what the underlying business transaction would be that generated the journal entry. The explanation for Journal Entry #1 is shown below as an example. 1 Cash Account Names Common Stock DR 100,000 100,000 CR Answer #1 The Cash account and Common Stock account both increased. The company received cash because someone invested in the company and became an owner by purchasing shares of common stock. Account Names DR CR 2 Cash 50,000 Notes Payable 50,000 Account Names Building Cash DR CR 125,000 25,000 Account Names 4 Rent Expense Account Names 5 Supplies Cash DR CR 500 500 DR CR 1250 Accounts Payable 1250 Account Names 6 Prepaid Insurance Account Names 7 Inventory Cash DR CR 3,000 3,000 DR CR 5,000 Accounts Payable 5,000 Account Names 8 Salaries Expense Cash DR CR 2,500 2,500 Account Names DR CR 9 Accounts Receivable 4,000 Sales Revenue 4,000 Cost of Goods Sold 1,000 Inventory 1,000 Account Names 10 Accounts Payable Cash DR CR 250 250 Service Revenue 3,200 Account Names DR CR 12 Cash 2,500 Unearned Service Revenue 2,500 338 133 22 Account Names 13 Interest Expense DR CR 85 Interest Payable 85 Account Names 14 Wages Expense Wages Payable Account Names 15 Unearned Service Revenue Account Names 16 Depreciation Expense DR CR 22,000 22,000 DR CR 1,000 Service Revenue 1,000 Accumulated Depreciation DR CR 32,400 32,400 Account Names 17 Supplies Expense Account Names 18 Insurance Expense Supplies DR CR 1,150 1,150 DR CR 325 Prepaid Insurance 325