The following transactions took place at Calhoun Counseling Services, a business established by Ronald Calhoun.
INSTRUCTIONS
For each transaction, set up T accounts from this list: Cash; Office Furniture; Office Equipment; Automobile; Accounts Payable; Ronald Calhoun, Capital; and Ronald Calhoun, Drawing.
Analyze each transaction. Record the amounts in the T accounts affected by that transaction. Use plus and minus signs to show increases and decreases in each account.
TRANSACTIONS
1. Ronald Calhoun invested $35,000 cash in the business.
2. Purchased office furniture for $8,500 in cash.
3. Bought a fax machine for $525; payment is due in 30 days.
4. Purchased a used car for the firm for $8,500 in cash.
5. Calhoun invested an additional $5,500 cash in the business.
6. Bought a new computer for $2,000; payment is due in 60 days.
7. Paid $525 to settle the amount owed on the fax machine.
8. Calhoun withdrew $2,500 in cash for personal expenses.
Analyze: Which transactions affected asset accounts?