Answer:
Jan. 1 Received cash from the investment made by the owner $14,000
Cash $14000(debit)
Investment $14000(credit)
Jan. 2 Received cash for providing accounting services, $9,500
Cash $9500 (debit)
Revenue $9500 (credit)
Jan. 3 Billed customers on account for providing services , $4,200
Accounts Receivable $4200(debit)
Revenue $4200(credit)
Jan. 4 Paid advertising expense, $700
Advertising expense $ 700 (debit)
Cash $700 (credit)
Jan. 5 Received cash from customers on account, $2,500
Cash $ 2500 (debit)
Accounts Receivables $2500 (credit)
Jan. 6 Owner withdrew $1,010
Owners Equity $1010 (debit)
Cash $1010 (credit)
Jan. 7 Received telephone bill, $900
Telephone Bill $ 900 (debit)
Account Payable - Telephone Service Supplier $ 900 (credit)
Jan. 8 Paid telephone bill, $900
Account Payable - Telephone Service Supplier $ 900 (debit)
Cash $ 900(credit)
Explanation:
Jan. 1 Received cash from the investment made by the owner $14,000
Assets of Cash are increasing whilst the future economic benefits from the Investment are decreasing.
Jan. 2 Received cash for providing accounting services, $9,500
We recognise Revenue to depict increases in economic benefit due to the increase in Asset - Cash
Jan. 3 Billed customers on account for providing services , $4,200
We recognise Revenue to depict increases in economic benefit due to the increase in Asset - Accounts Receivable
Jan. 4 Paid advertising expense, $700
We recognise an expense - Advertising due to decrease in Asset - Cash
Jan. 5 Received cash from customers on account, $2,500
Recognise an Asset - Cash and Derecognise Asset - Accounts Receivable to settlement of accounts by customers on Account
Jan. 6 Owner withdrew $1,010
De-recognise Equity Element - Owners Equity and also De-recognise Asset - Cash
Jan. 7 Received telephone bill, $900
Recognise an expense Telephone Bill and recognise increase in liability element of Account Payable - Telephone Service Supplier
Jan. 8 Paid telephone bill, $900
Account Payable - Telephone Service Supplier $ 900 (debit)
Cash $ 900(credit)
De-recognise the Liability element - Account Payable - Telephone Service Supplier and also de-recognise Asset -Cash
