Exercise 2–7 Account(s) Account(s) Debited Credited Example: Purchased inventory for cash 3 5 1. Paid a cash dividend. 10 5 2. Paid rent for the next three months. 8 5 3. Sold goods to customers on account. 4,16 9,3 4. Purchased inventory on account. 3 1 5. Purchased supplies for cash. 6 5 6. Paid employees wages for September. 15 5 7. Issued common stock in exchange for cash. 5 12 8. Collected cash from customers for goods sold in 3. 5 4 9. Borrowed cash from a bank and signed a note. 5 11 10. At the end of October, recorded the amount of supplies that had been used during the month. 7 6 11. Received cash for advance payment from customer. 5 13 12. Accrued employee wages for October. 17 15 Exercise 2–8 1. Prepaid insurance ($12,000 x 30/36) .............................. Insurance expense .................................................. 2. Depreciation expense ................................................. Accumulated depreciation .................................... 3. Salaries expense ......................................................... Salaries payable ..................................................... 4. Interest expense ($200,000 x 12% x 2/12) ....................... Interest payable ...................................................... 5. Unearned rent revenue ............................................... Rent revenue (1/2 x $3,000)....................................... 2–20 10,000 15,000 18,000 4,000 1,500 10,000 15,000 18,000 4,000 1,500