Chapter 2, Problem 13E

Assume the following T−accounts reflect Belle Co.’s general ledger and its first seven transactions a through g, which are posted to them. Identify the explanation from 1 through 7 below that best describes each transaction a through g reflected in the T−accounts, and enter that letter in the blank space in front of each numbered explanation.

____1. The company paid $4,800 cash in advance for prepaid insurance coverage.

____2. D. Belle created a new business and invested $6,000 cash, $7,600 of equipment, and $12,000 in web servers in exchange for common stock.

____3. The company purchased $900 of supplies on account.

____4. The company received $4,500 cash for services provided.

____5. The company paid $900 cash toward accounts payable.

____6. The company paid $3,400 cash for equipment.

____7. The company paid $800 cash for selling expenses.