Question

the first few transactions of ashleys home care have been posted to the t - accounts. prepare the journal entries that served as the sources for the five transactions. include an explanation for each entry.
prepare each transaction in order according to the reference number shown in the accounts provided (record debits first, then credits. select the explanation on the last line of the journal entry.)
prepare the journal entry for transaction (1)
accounts and explanation debit credit
t - accounts
cash supplies building equipment
(1) 55,000 31,000 (3) (2) 200 (3) 36,000 (5) 4,200
(4) 90,000 4,200 (5)
accounts payable notes payable common stock
200 (2) 80,000 (4) 55,000 (1)

Explanation:

Step1: Identify transaction (1)

From T - accounts, transaction (1) is issuance of common stock for cash.
Debit Cash $55,000, Credit Common Stock $55,000.

Step2: Record journal entry

Accounts and Explanation	Debit	Credit
Common Stock		$55,000
(Issued common stock for cash)

Answer:

Accounts and Explanation	Debit	Credit
Common Stock		$55,000
(Issued common stock for cash)