Special Journals The following transactions occurred during October (the first month of operations): 10/01 Purchased merchandise on account. 10/02 Sold merchandise on account. 10/03 Sold merchandise for cash. 10/04 Paid rent. 10/05 Purchased office supplies on account. 10/10 Borrowed cash from the bank by a signing a note. 10/11 Paid a supplier on account. 10/12 Sold an old copier on account. 10/15 Received cash on account from a customer. 10/22 Returned merchandise to a supplier and received credit on account. 10/28 Received a utility bill, to be paid next month. 10/19 Returned merchandise to a supplier and received a cash refund. 10/31 Paid salaries. Required: Identify in which journal each of these transactions would be recorded. Cash vs. Accrual Basis A medical clinic maintains its accounting records on a cash basis. During the year, the clinic collected $142,600 from patients and paid $55,470 in expenses. Analysis of the records revealed the following Required: a. Show journal entries that account for the change in each account balance. Explain WHY the change is added to or deducted from cash basis net income. b. Convert cash basis net income to accrual basis net income