1. The company was formed when Camen Bay contributed $3,000 to the firm 2. A loc

Question

1. The company was formed when Camen Bay contributed $3,000 to the firm

2. A local bank loaned the firm $4,000 in exchange for hte firm's 1 year note payable

3. Merchandise costing $3,500 was purchased with cash

4. Goods costing $825 were sold to tourists for a total of $2,500 in cash, and the students were paid commisions.

5. A payment of $1,500 was made to the local bank on the note payable

6. Carmen Bay withdrew $750 cas for personal use

Date Accounts Assets =                  Liabilities + Owner's Equity     Cash Other Assets       Contributed Capital Retained Earnings   Cash                 Contibuted Capital                 Cost of sales                 Notes Payable                 Merchandise Inventory                 Commission Expense              

Explanation / Answer

1. (debit) Cash    3000

             (credit) Constributed capital   3000

2. (debit) Cash    4000

              (credit) Note payable   4000

3. (debit) Merchandise inventory   3500

            (credit) Cash                              3500

4. (debit) Cash   2500

           (credit) Cost of sales 825

           (credit) Commision expense 1675

5. (debit) Note payable 1500

             (credit) Cash            1500

6. (debit) Contributed capital 750

             (credit) Cash                    750

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