Answer:
Explanation:
The effect of each transactions are shown below:
The journal entries are shown below:
1. Cash A/c Dr $70,000
To Derrick's capital A/c $70,000
(Being the invested cash is recorded)
So as we can see that the cash is debited and derrick capital is credited
2. Equipment A/c Dr $10,000
To Cash A/c $10,000
(Being the equipment is paid for cash)
So as we can see that the equipment is debited and cash is credited
3. Cash A/c Dr $7,000
To Service revenue A/c $7,000
(Being the cash is received)
So as we can see that the cash is debited and service revenue is credited
4. Advertising expense A/c Dr $1,800
To Cash A/c $1,800
(Being the advertising expense is paid for cash)
So as we can see that the advertising expense is debited and cash is credited
5. Supplies A/c Dr $1,000
To Cash A/c $1,000
(Being the supplies are paid in cash)
So as we can see that the supplies are debited and cash is credited
