Selected transactions for Welcome Home, an interior decorator corporation, in its first month of business, are as follows.
For each transaction indicate (a) the basic type of account debited and credited (asset, liability, stockholders' equity); (b) the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); (c) whether the specific account is increased or decreased; and (d) the normal balance of the specific account. Use the following format, in which transaction 1 is given as an example.
Journalize the transactions. Do not provide explanations
This would be the format for your journal entries, and the reasoning for each item based on the information. I have included additional references at the bottom for you to research the journal entries and information further. The example entry is wrong. Advertising expense is an expense -- not an asset. Cash would be decreased (credited), and it has a normal debit balance because cash is an asset. The advertising expense account has a normal credit balance because it is an expense.
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This solution provides all correct journal entries for Welcome Home, an interior decorator corporation, in its first month of business. All necessary information is provided based on the exercise instructions. Complete solution is provided.