You are on page 1of 9

- Debit: an amount of money that is taken from an account

- Credit: money that a bank or business will allow a person to use and then pay back in the
future

- Liability: payment or money for a which a person or business is legally responsible

Owner’s Investment to Form the Business

June 1: Joan Miller invests $40,000 in cash to form Miller Design Studio.

Assets = Liabilities + Owner’s Equity

Cash Miller, Capital

June 1 $40,000 June 1 $40,000

June 2: Orders office supplies $5,200

June 3: Rents office pay 2 months’ rent in advance, $3,200

Assets = Liabilities + Owner’s


Equity

Cash Miller, Capital

June 1 June 3 $3,200 June 1 $40,000


$40,000

Prepaid rent

June 3 $3,200

June 5: Receives office supplies ordered on 2/6, and invoice for $5,200

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital


June 1 $40,000 June 3 $3,200 June 5 $5,200 June 1 $40,000

Prepaid rent

June 3 $3,200

Office supplies

June 5 $5,200

June 6 Purchases office equipment, $16,320; pays $13,320 in cash and agrees to pay rest in the
next month

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 5 $5,200 June 1 $40,000

June 6 $13,320 June 6 $3,000

Prepaid rent

June 3 $3,200

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

June 9 Makes a partial payment of the amount owed office supplies received on June 5, $2,600

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 6 $13,320 June 6 $3,000


June 9 $2,600

Prepaid rent

June 3 $3,200

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

June 10 performs a service for an investment advisor by designing a series of brochures and
collects a fee in cash, $2,800

+ perform: to do an action or activity that usually requires training or skill

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 9 $2,600

Prepaid rent Design Sales


June 3 $3,200 June 10 $2,800

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

June 15 performs a service for a department store by designing a TV commercial bills for the fee
now but will collect the fee later, $9,600
Assets = Liabilities + Owner’s
Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 9 $2,600

Prepaid rent Design Sales


June 3 $3,200 June 10 $2,800

June 15 $9,600

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

A/c Receivable

June 15 $9,600

June 19 Accepts an advance fee as a deposit on a series of brochures to be designed, $1,400

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600


Prepaid rent Unearned Revenue Design Sales
June 3 $3,200 June 19 $1,400 June 10 $2,800

June 15 $9,600

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

A/c Receivable

June 15 $9,600

June 22 Receives cash from customer previously billed on June 15, $5,000

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

June 22 $5,000

Prepaid rent Unearned Revenue Design Sales


June 3 $3,200 June 19 $1,400 June 10 $2,800
June 15 $9,600

Office supplies

June 5 $5,200

Office equipment

June 6 $16,320

A/c Receivable

June 15 $9,600 June 22 $5,000

June 26 pays employees four weeks’ wages, $4,800

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

June 22 $5,000 June 26 $4,800

Prepaid rent Unearned Revenue Design Sales


June 3 $3,200 June 19 $1,400 June 10 $2,800

June 15 $9,600

Office supplies Wages expenses


June 5 $5,200 June 26 $4,800

Office equipment
June 6 $16,320

A/c Receivable

June 15 $9,600 June 22 $5,000

June 30 Receives but does not pay, the utility bill that is due next month $680

Assets = Liabilities + Owner’s


Equity

Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600

June 22 $5,000 June 26 $4,800

June 30 $680

Prepaid rent Unearned Revenue Design Sales


June 3 $3,200 June 19 $1,400 June 10 $2,800

June 15 $9,600

Office supplies Wages expenses


June 5 $5,200 June 26 $4,800

Office equipment Utility expenses


June 6 $16,320 June 30 $680

A/c Receivable

June 15 $9,600 June 22 $5,000

June 30 Withdraw $2,800 in cash


Cash A/c payable Miller, Capital

June 1 $40,000 June 3 $3,200 June 9 $2,600 June 5 $5,200 June 1 $40,000

June 10 $2,800 June 6 $13,320 June 6 $3,000

June 19 $1,400 June 9 $2,600 June 30 $680


June 22 $5,000 June 26 $4,800

June 30 $2,800

Prepaid rent Unearned Revenue Design Sales


June 3 $3,200 June 19 $1,400 June 10 $2,800

June 15 $9,600

Office supplies Wages expenses


June 5 $5,200 June 26 $4,800

Office equipment Utility expenses


June 6 $16,320 June 30 $680

A/c Receivable Miller, Withdrawals


June 15 $9,600 June 22 $5,000 June 30 $2,800