Write down all the steps required for journalizing the following business transa

Question

Write down all the steps required for journalizing the following business transactions:

On January 5th, Mr. David took $20,000 from his personal savings and deposited it to start a business account in the name of David Transport Service.
On January 6, David Transport Service issued check No. 506 for $2,000 to buy a computer system.
On January 10, David Transport Service paid $100 to Blue company for telephone charges. Memorandum 5.
On January 15, David Transport Service mailed check No. 507 for $500 toward the month’s rent.
On January 20, David wrote check No. 508 to withdraw $500 cash for personal use.

Explanation / Answer

January 5th Dr. Cash 20,000 Cr. Opening equity balance - David transport service 20,000 January 6th Dr. Equipment- computer 2000 Cr. Cash 2000 January 10th Dr. Expenses - Telephone 100 Cr. Cash 100 January 15 Dr. Expenses - rent 500 Cr. Cash 500 January 20 Dr. Opening equity balance - David transport service 500 Cr. cash 500

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