Group 4 Problem P3-1 Tony Phan Liliana Doonan Julee Maidenberg Erik Peterson Shawn Croll

1. Group 4Problem P3-1Tony PhanLiliana DoonanJulee Maidenberg Erik Peterson Shawn Croll

2. Example: Purchased equipment for use in the business; paid one-third cash and signed a note payable for the balance Debit: Equipment Credit: Cash, Note payable Choudhury Corporation B. Issued stock to new investors. Debit: Cash Credit: Contributed Capital C. Paid cash for salaries and wages. Debit: Operating expenses Credit: Cash

3. D. Collected cash for services performed this period. Debit: Cash Credit: Service revenue E. Collected cash on accounts receivable for services performed last period. Debit: Cash Credit: Accounts receivable Performed services this period on credit. Debit: Accounts receivable Credit: Service revenue

4. Paid operating expenses incurred this period. Debit: Operating expenses Credit: cash Paid cash on accounts payable for expenses incurred last period. Debit: Accounts payable Credit: cash I. Incurred operating expenses this period to be paid next period. Debit: Operating expenses Credit: Accounts payable

5. Purchased supplies to be used later; paid cash Debit: Supplies on Hand Credit: Cash K. Used some of the supplies on hand for operation. Debit: Operating expenses Credit: Supplies on Hand Purchased a patent (an intangible asset); paid cash. Debit: Patents Credit: Cash

6. M. Made a payment on the equipment note in (a); the payment was part principal and part interest expense. Debit: Note payable, interest expense Credit: cash N. Paid three-fourths of the income tax expense for the year. The balance will be paid next year. Debit: Income tax expense Credit: income taxes payable, cash On the last day of the current period, paid cash for an insurance policy covering the next two years. Debit: Prepaid expenses Credit: Cash