Knights. Inc., provides agricultural drone services. The following business transactions occurring during September as described below.

1. On September 1, the company billed customers $6,000 on account for consulting services rendered. Customers are required to make full payment within 30 days. (Knights, Inc., uses an account entitled Consulting Revenue when billingcustomers.)
2. On September 3, the company purchased office supplies costing $3,840, paying $960 cash and charging the remainder on the company's 30-day account at Office Depot. The supplies are expected to last severalmonths.
3. On September 5, the company returned to Office Depot $120 of supplies that were not needed. The return of these supplies reduced by $120 the amount owed to OfficeDepot.
4. On September 17, the company issued an additional 1,000 shares of capital stock at $6 per share. The cash raised will be used to purchase new equipment inSeptember.
5. On September 22, the company received $1,440 cash from customers it had billed on September1.
6. On September 29, the company paid its outstanding account payable to OfficeDepot.
7. On September 30, a cash dividend totaling $2,160 was declared and paid to thecompany's

stockholders.

INSTRUCTIONS:

1. Prepare an analysis of each of these transactions (remember we are using double-entry accounting). An analysis of Transaction 1 is provided here as an example. Complete the analysis for Transactions2-7.
   1. Example First Entry: The asset Accounts Receivable was increased. Increases in assets are recorded by debits. Debit Accounts Receivable$6,000.
   2. Example Corresponding Entry: Revenue has been earned. Revenue increases owners' equity. Increases in owners' equity are recorded by credits. Credit ConsultingRevenue

$6,000.

1. Prepare journal entries, including explanations, for thesetransactions.
2. How does the realization principle influence the way the September 1 billings to customers are recorded in the accountingrecords?
3. How does the matching principle influence the way the September 3 purchase of supplies is recorded in the accountingrecords?