1. Four transactions that occurred during June are listed below.

   1. June 1: Issued common stock to several investors for $71,600.
   2. June 8: Purchased equipment for $12,400 cash.
   3. June 15: Made cash sales of $21,100 to customers.
   4. June 29: Paid a $6,900 dividend to stockholders.

   Required:

   Prepare journal entries for the transactions.

   June 1	Cash Common Stock Dividends Equipment Sales Revenue
   	Cash Common Stock Dividends Equipment Sales Revenue
   	(Record issuance of common stock)
   8	Cash Common Stock Dividends Equipment Sales Revenue
   	Cash Common Stock Dividends Equipment Sales Revenue
   	(Record purchase of equipment)
   15	Cash Common Stock Dividends Equipment Sales Revenue
   	Cash Common Stock Dividends Equipment Sales Revenue
   	(Record cash sale)
   29	Cash Common Stock Dividends Equipment Sales Revenue
   	Cash Common Stock Dividends Equipment Sales Revenue
   	(Declared and paid cash dividends)

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1. Transaction Analysis

   The following events occurred for Parker Company.

   Required:

   Analyze the effect of each transaction on the accounting equation. For example, if salaries of $500 were paid, the answer would be "Decrease in stockholders' equity (expense) $500 and decrease in assets (cash) $500."

   a. Performed consulting services for a client in exchange for $3,200 cash.

   • Increase assets (cash)
   • Decrease assets (cash)
   • Decrease stockholders' equity (revenue)
   $3,200 and
   • increase stockholders' equity (revenue)
   • decrease assets (cash)
   • decrease stockholders' equity (revenue)
   $3,200.

   b. Performed consulting services for a client on account, $1,700.

   • Increase assets (accounts receivable)
   • Increase assets (cash)
   • Decrease stockholders' equity (revenue)
   $1,700 and
   • increase stockholders' equity (revenue)
   • decrease assets (accounts receivable)
   • decrease stockholders' equity (revenue)
   $1,700.

   c. Paid $30,000 cash for land.

   • Increase assets (land)
   • Decrease stockholders' equity (expense)
   • Decrease assets (land)
   $30,000 and
   • decrease stockholders' equity (expense)
   • decrease assets (cash)
   • increase liabilities (notes payable)
   $30,000.

   d. Purchased office supplies on account, $900.

   • Increase assets (supplies)
   • Decrease assets (supplies)
   • Decrease liabilities (accounts payable)
   $900 and
   • increase liabilities (accounts payable)
   • decrease assets (supplies)
   • decrease liabilities (accounts payable)
   $900.

   e. Paid a $2,500 cash dividend to stockholders.

   • Increase assets (cash)
   • Increase stockholders' equity (dividend)
   • Decrease assets (cash)
   $2,500 and
   • increase assets (cash)
   • increase stockholders' equity (dividend)
   • decrease stockholders' equity (dividend)
   $2,500.

   f. Paid $550 on account for supplies purchased in Transaction d.

   • Increase assets (cash)
   • Increase liabilities (accounts payable)
   • Decrease assets (cash)
   $550 and
   • increase assets (cash)
   • increase liabilities (accounts payable)
   • decrease liabilities (accounts payable)
   $550.

   g. Paid $800 cash for the current month's rent.

   • Increase assets (cash)
   • Decrease stockholders' equity (expense)
   • Increase liability (payable)
   $800 and
   • increase assets (cash)
   • decrease assets (cash)
   • decrease assets (cash)
   $800.

   h. Collected $1,500 from client in Transaction b.

   • Increase assets (cash)
   • Increase assets (accounts receivable)
   • Decrease assets (cash)
   $1,500 and
   • increase assets (accounts receivable)
   • decrease assets (cash)
   • decrease assets (accounts receivable)
   $1,500.

   i. Stockholders invested $20,000 cash in the business.

   • Increase assets (cash)
   • Decrease assets (cash)
   • Decrease stockholders' equity (common stock)
   $20,000 and
   • increase stockholders' equity (common stock)
   • decrease assets (cash)
   • decrease stockholders' equity (common stock)
   $20,000.

   2. Conceptual Connection: For Event d, what accounting principle did you use to determine the amount to be recorded for supplies?

   • Conservatism principle
   • Expense recognition principle
   • Historical cost principle