Answer:
Panther Detective Agency
Journal Entries:
a) Debit Equipment Account $15,000
Credit Notes Payable $15,000
To record purchase of truck with a note.
b) Debit Supplies Account $600
Credit Cash Account $600
To record purchase of office supplies for cash.
c) Debit Rent Expense $800
Credit Cash Account $800
To record payment of rent for the current month.
Explanation:
a) The purchase of a truck increases the Equipment Account and the Notes Payable Account by $15,000.
b) Payment for office supplies reduces the Cash Account and increases the Supplies Account by $600.
c) The payment for rent for the current month increases the Rent Expense Account and reduces the Cash Account by $800.
d) The use of journal entries is to record business transactions as they occur. It makes it easier to know which account will be credited and which to be debited in the Ledger.
