1. Think about the transactions listed below. a. A company obtains a $10,000 loa
ID: 2503853 • Letter: 1
Question
1. Think about the transactions listed below.
a. A company obtains a $10,000 loan from a bank.
b. A company purchases $15,000 of inventory from its suppliers. They paid $5,000 today and will pay the reminder at a later date.
c. A company makes a $20,000 sale. The customer will pay in 30 days.
For each transaction:
i. What accounts would be impacted?
ii. Would those accounts increase or decrease?
iii. What would you debit and what would you credit if you were doing a journal entry?
Think about the transactions listed below. A company obtains a $10,000 loan from a bank. A company purchases $15,000 of inventory from its suppliers. They paid $5,000 today and will pay the reminder at a later date. A company makes a $20,000 sale. The customer will pay in 30 days. For each transaction: What accounts would be impacted? Would those accounts increase or decrease? What would you debit and what would you credit if you were doing a journal entry?Explanation / Answer
1]DEBIT CASH = 10000
CREDIT BANK LOAN = 10000
ACCOUNTS IMPACTED = CASH & BANK LOAN
CASH A/C WOULD INCREASE
BANK LOAN WOULD INCREASE
2]DEBIT PURCHASES = 15000
CREDIT CASH = 5000
CREDIT ACCOUNTS PAYABLE = 10000
ACCOUNTS IMPACTED = PURCHASES & CASH &ACCOUNTS PAYABLE
PURCHASES A/C WOULD INCREASE
CASH A/C WOULD DECREASE
ACCONTS PAYABLE WOULSD INCREASE
3]DEBIT ACCOUNTS RECIEVABLE = 20000
CREDIT SALES = 20000
ACCOUNTS IMPACTED = ACCOUNTS RECIEVABLE&SALES
SALES WOULD INCREASE
ACCOUNTS RECEIVABLE WOULD INCREASE
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