DATE ACCOUNT TITLE DEBIT

1 Cash 100,000
Owner's Equity
To record owner's initial investment

2 Cash 800,000
Accounts Payable
To record loan

3 Equipment 200,000
Cash
To record purchase of equipment

4 Inventory 500,000
Cash
To record purchases of inventory

5 Cost of Goods Sold 50,000

Inventory
To record the cost of goods sold

5 Cash 120,000
Sales
To record sale of goods

6 Prepaid Rent 60,000

Cash
To record advance payment of rent

7 Accounts Payable 400,000

Cash
To record payment half of the loan

8 Interest Expense 80,000

Cash
To record payment of interest expense

9 Utilities Expense 10,000

Cash
To record payment of interest expense

10 Salaries Expense 32,000

Cash
To record payment of salaries expense
2,352,000
CREDIT

100,000

ACCOU
Date ASSET =
800,000 1 Cash 100,000
2 Cash 800,000
3 Equipment 200,000
Cash (200,000)
200,000 4 Inventory 500,000
Cash (500,000)
5 Inventory (50,000)
5 cash 120,000
500,000 6 Prepaid rent 60,000
Cash (60,000)
7 Cash -400,000
8 Cash (80,000)
50,000 9 Cash (10,000)
10 Cash (32,000)
448,000
448,000 =
120,000

60,000

400,000

80,000

10,000

32,000

2,352,000
 ACCOUNTING EQUATION
LIABILITY + EQUITY
Owner's capital 100,000
Accounts Payable 800,000

Cost Of goods sold (50,000)

Sales 120,000

Accounts Payable (400,000) Interest Expense (80,000)

Utilities Expense (10,000)
Salaries expense (32,000)

400,000 48,000
448,000
DATE ACCOUNT TITLE DEBIT
1 Cash 200,000
Owner's Equity
To record owner's initial investment

2 Cash 600,000
Loans Payable
To record loan

3 Equipment 450,000
Cash
To record purchases of equipment

4 Prepaid Rent 20,000

Cash
To record advance payment of rent

5 Inventory 500,000
Accounts Payable
To record purchases of inventory on account

6 Cost of Sales 80,000

Inventory
To record the cost of sales

6 Cash 200,000
Sales
To record sales of goods

7 Cost of Sales 400,000

Inventory
To record the cost of sales

7 Accounts Receivables 900,000

Sales
To record sales of goods on account

8 Accounts Payable 400,000

Cash
To record payment of accounts payable

9 Owner's Withdrawals 10,000

Cash
To record owner's withdrawals

10 Interest Expense 15,000

Cash
To record payment of interest expense
3,775,000
CREDIT

200,000

Date ASSET
1 Cash
600,000 2 Cash
3 Equipment
Cash
4 Prepaid Rent
450,000 Cash
5 Inventory
6 Inventory
Cash
20,000 7 Inventory
Accounts Receivables
8 Cash
9 Cash
500,000 10 Cash

80,000

200,000

400,000

900,000

400,000

10,000

15,000
3,775,000
 ACCOUNTING EQUATION
ASSET = LIABILITY + EQUITY
200,000 Owner's Equity 200,000
600,000 Loans Payable 600,000
450,000
(450,000)
20,000
(20,000)
500,000 Accounts Payable 500,000
(80,000) Cost of Sales (80,000)
200,000 Sales 200,000
(400,000) Cost of Sales (400,000)
900,000 Sales 900,000
(400,000) Accounts Payable (400,000)
(10,000) Owner's Withdrawal (10,000)
(15,000) Interest Expense (15,000)
1,495,000 700,000 795,000
1,495,000 = 1,495,000