Question

Windsor, Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,850 cash. 16 Receives $400 from clients for services performed. 27 Pays secretary $1,760 salary.

Answer 1

Answer:

a) the accounting equations keeps equals

b) in the explanation at the bottom

Explanation:

Agu 1.

a)the effect on the accounting equation

1. Opens an office as a financial advisor, investing $4,100 in cash in exchange for common stock.

the asset keeps the same

Pays insurance in advance for 6 months, $1,850 cash

the asset keeps the same

Receives $400 from clients for services performed

the asset increase because the cash increase +$400 and the accounts receivable decreased

Pays secretary $1,760 salary.

The cash decrease because paid -$1,760 and the account of the salaries to pay decrease -$1.760

b) the debit-credit analysis

                              debit          credit

Cash                                       -$4.100                   assets account

investing                +4100                                     assets account

Cash                                       -$1.850                   assets account

Pays insurance     +1.850                                     assets account

Cash                       +400                                      assets account

Acc receivable                       -400                       assets account

cash                         -1.760                                    assets account

wages to pay                          -1.760                    liabilities account