Account options: Cash, Accounts Receivable, Inventory, Prepaid Rent, Fixtures an

Question

Account options: Cash, Accounts Receivable, Inventory, Prepaid Rent, Fixtures and Equipment, Accounts Payable, Interest Payable, Wages Payable, Notes Payable, Paid-in Capital, Retained Earnings, Leave Blank.

Transaction 4 The owners paid $2,500 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $7,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry]. Account: Dollar amount Account: Account: Account: Account: Dollar amount: Dollar amount: Dollar amount: Dollar amount:

Explanation / Answer

We know that the owner's paid the expenses so their capital(Paid in capital) must increase and advertisement is an expense so our profit(Retain earnings) must decrease.

Retain earnings (Dr.) 9,500

Paid in capital(Cr.) 9,500

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