Learning Objective : Analyze the impact of business transactions on accounts.

Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture, Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and Rent

Record the following transactions directly in the T-accounts without using a journal. Use the letters to identify the transactions.

a. Stephen Garner opened a law firm by investing $25,000 cash and office furniture with a fair value of $10,400. Organized as a professional corporation, the business issued common stock to Garner.

b. Paid monthly rent of $1,800.

c. Purchased office supplies on account, $1,050.

d. Paid employees' salaries of $3,600.

e. Paid $500 of the account payable created in transaction c.

f. Performed legal service on account, $10,000.

g. Declared and paid dividends of $3,200.