Transaction Analysis e4A. Analyze transactions a–g , using the example that follows. a. Melissa… 1 answer below »

Transaction Analysis

e4A. Analyze transactions a–g, using the example that follows.

a.    Melissa Faubert established Faubert’s Beauty Parlor, Inc., by incorporating and investing $2,400 in exchange for 240 shares of $10 par value common stock.

b.    Paid two months’ rent in advance, $1,680.

c.    Purchased supplies on credit, $120.

d.   Received cash for salon services, $600.

e.    Paid for supplies purchased in c.

f.     Paid utility bill, $72.

g.    Declared and paid a dividend of $90.


a.     The asset account Cash was increased. Increases in assets are recorded by debits. Debit Cash $2,400. A component of stockholders’ equity, Common Stock, was increased. Increases in Common Stock are recorded by credits. Credit Common Stock $2,400.


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