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Problem 2 The following transactions have occurred at the Litchfield Inn: a) A new computer was purchased by paying 30% down and signing a bank
Problem 2 The following transactions have occurred at the Litchfield Inn: a) A new computer was purchased by paying 30% down and signing a bank note for the remainder b) Salaries for the month were paid from cash. c) Kati Litchfield, the owner, withdrew cash for her personal use. d) Office Supplies were purchased on account. The supplies will be expensed e) Sales to guests were made on account. f) Excess cash was invested in temporary investments. g) A . h) Rent for the following month was paid out of cash. Required: For each of the transactions, (1) state which accounts are affected and (2) state the normal balance for each account, and (3) indicate whether the transaction is a debit or credit to that account. Set up your answers in supplier was paid on account for supplies purchased 20 days ago lumns, as indicated below: Normal Balance of accounts Debit Debit Credit Accounts Affected Debit or Credit from transactions Debit Credit Credit a) Office supplies Cash Notes Payable b) c)
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