Book 1 - Chapter 24

24-1, continued

Riverside Enterprises performs $500 of services on account.

A = L + OE

Accounts Receivable
500

Service Revenue
	500

Crescent City Company receives a $450 bill for utility services. The bill will be paid later.

A = L + OE

Accounts Payable
	450

Utility Expense
450

Note: Remember that an increase in an expense decreases the owner’s equity, and the equation
stays in balance.

Sonoma Company, (f ) above, performs $1,200 of services.

A = L + OE

Unearned Revenue
1,200

Service Revenue
	1,200

Atascadero Company makes a $1,000 loan payment. The payment includes $200 of interest
expense.

A = L + OE

Cash
	1,000

Notes Payable
800

Interest Expense
200

Note: Remember that an increase in an expense is decreasing owner’s equity. Therefore, the
equation remains in balance.

Learning Goal 24, continued

SOLUTIONS

Learning Goal 24: Use a Journal

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