Answer:
The accounting entry for each transaction is given below.
Gibson contributed $10,000 to the business in exchange for capital.
Debit Cash Asset $10,000
Credit Capital $10,000
b. Purchased equipment for $5,000 on account.
Debit equipment Asset $5,000
Credit Payable Liability $5,000
c. Paid $400 for office supplies.
Debit payable $400
Credit Cash Asset $400
d. Earned and received $2,500 cash for service revenue.
Debit Cash Asset $2,500
Credit Income $2,500
e. Paid $400 for wages to employees.
Debit Wages expense $400
Credit Cash Asset $400
f. Gibson withdrew $1,000 cash
Debit Capital $1,000
Credit Cash Asset $1,000
.g. Earned $1,000 for services provided. Customer has not yet paid.
Debit Receivable $1,000
Credit Service Income $1,000
h. Paid $1,000 for rent.
Debit Rent expense $1,000
Credit Cash Asset $1,000
i. Received a bill for $250 for the monthly utilities. The bill has not yet been paid.
Debit Utility expense $250
Credit payable $250
