Sarasota Corp. has the following transactions during August of the current year.

Question

Sarasota Corp. has the following transactions during August of the current year. Aug. 1 Issues shares of common stock to investors in exchange for $13,300. Aug. 4 Pays insurance in advance for 3 months, $1,900 Aug. 16 Receives $1,000 from clients for services rendered Aug. 27 Pays the secretary $570 salary. Indicate the basic analysis and the debit-credit analysis. Basic Analysis Debit-Credit Analysis Aug. 1 The asset is Debits Debit the stockholders' equity account is Credits Credit Aug. 4 The asset is Debits Debit the asset IS Credits Credit

Explanation / Answer

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Basic Analysis Debit credit Analysis Aug 1 The asset Cash is increased Debits Increase Assets the stockholder equity account common stock is increased Debit Cash $1,300 credits increase stockholder equity credit Common stock $13,300 Aug 4 The Asset Prepaid Insurance increased Debits Increase Assets Asset Cash is decreased Debit Prepaid Insurance $1,900 Credit Decrease Assets Credit Cash $1,900 Aug 16 Asset Cash is increased The revenue Service Revenue is increased Debits increase Assets Debit Cash $1,000 Credit increase Revenue Cr Service Revenue $1,000 Aug 27 expense Salaries Expense is increased Debits increase expense Asset Cash is decreased Dr salaries expenses $570 credits decrease Assets cr cash $570

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