Explanation:
The following accounts are debited or credited
1. Sold merchandise (Merchandise Inventory), $1,000 = Since merchandise inventory is sold so this account should be credited
2. Received cash from customers on accounts due (Accounts Receivable), $2,450 = Since cash is received so we debited the cash account and credited the account receivable account
3. Paid rent in advance (Prepaid Expenses), $1,250 = Since the rent is paid in advance so we debited the prepaid expenses account and credited the cash account
4. Borrowed money from First National Bank (Notes Payable), $12,000 = Since the money is borrowed so we debited the cash account and credited the note payable account
5. Paid dividends (Cash), $800 = Since the dividend is paid so we debited the dividend account and credited the cash account
6. Delivered merchandise to customers (Merchandise Inventory), $3,500 = Since the merchandise is delivered to customers so we credited the merchandise inventory account
7. Paid O’Brien Associates $3,000 owed them (Accounts Payable) = Since the amount is paid so we debited the account payable and credited the cash account
8. Bought merchandise on open account (Accounts Payable), $5,400 = Since the merchandise is bought on account so we debited the merchandise inventory and credited the account payable account
