Exercise 2-7

Rowand Enterprises had the following selected transactions.

1. Aaron Rowand invested $4,000 cash in the business in exchange for ordinary shares.

2. Paid office rent of $1,100.

3. Performed consulting services and billed a client $5,200.

4. Declared and paid a $700 cash dividend.

Instructions

(a) Indicate the effect each transaction has on the accounting equation (Assets Liabilities+Equity), using plus and minus signs.

(b) Journalize each transaction. (Omit explanations.)

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