Question

TRANSACTION 1. INVESTMENT BY STOCKHOLDERS 1. Ray and Barbara Neal decide to start a smartphone app development company that they incorporate as soft byte SA. On September 1, 2020, they invest $15,000 cash (+A = Dr.) in the business in exchange for $15,000 of ordinary shares (+OE = Cr) TRANSACTION 2. PURCHASE OF EQUIPMENT FOR CASH 2. Soft byte SA purchases computer equipment (+A = Dr.) for $7,000 cash (-A = Cr.) TRANSACTION 3. PURCHASE OF SUPPLIES (+ A = Dr.) ON CREDIT (+L (+AP) = Cr.) 3. Softbyte SA purchases for $1,600 headsets and other accessories expected to last several months. The supplier allows Softbyte to pay this bill in October. TRANSACTION 4. SERVICES PERFORMED FOR CASH (+A = Dr.) 4. Softbyte SA receives $1,200 cash from customers for app development services REVENUE (+OE = Cr.) it has performed TRANSACTION 5. PURCHASE OF ADVERTISING Expense (OE. Dr.) ON CREDIT (+L=Cr. = AP) 5. Softbyte SA receives a bill for $250 from the Programming News for advertising on its website but postpones payment

          TRANSACTION 1. INVESTMENT BY STOCKHOLDERS
1. Ray and Barbara Neal decide to start a smartphone app development company
that they incorporate as soft byte SA. On September 1, 2020, they invest $15,000
cash (+A = Dr.) in the business in exchange for $15,000 of ordinary shares (+OE =
Cr)
TRANSACTION 2. PURCHASE OF EQUIPMENT FOR CASH
2. Soft byte SA purchases computer equipment (+A = Dr.) for $7,000 cash (-A = Cr.)
TRANSACTION 3. PURCHASE OF SUPPLIES (+ A = Dr.) ON CREDIT (+L (+AP) =
Cr.)
3. Softbyte SA purchases for $1,600 headsets and other accessories expected to last
several months. The supplier allows Softbyte to pay this bill in October.
TRANSACTION 4. SERVICES PERFORMED FOR CASH (+A = Dr.)
4. Softbyte SA receives $1,200 cash from customers for app development services
REVENUE (+OE = Cr.) it has performed
TRANSACTION 5. PURCHASE OF ADVERTISING Expense (OE. Dr.) ON CREDIT
(+L=Cr. = AP)
5. Softbyte SA receives a bill for $250 from the Programming News for advertising on
its website but postpones payment

TRANSACTION 1. INVESTMENT BY STOCKHOLDERS
1. Ray and Barbara Neal decide to start a smartphone app development company
that they incorporate as soft byte SA. On September 1, 2020, they invest 15,000
cash (+A = Dr.) in the business in exchange for15,000 of ordinary shares (+OE =
Cr)
TRANSACTION 2. PURCHASE OF EQUIPMENT FOR CASH
2. Soft byte SA purchases computer equipment (+A = Dr.) for 7,000 cash (-A = Cr.)
TRANSACTION 3. PURCHASE OF SUPPLIES (+ A = Dr.) ON CREDIT (+L (+AP) =
Cr.)
3. Softbyte SA purchases for1,600 headsets and other accessories expected to last
several months. The supplier allows Softbyte to pay this bill in October.
TRANSACTION 4. SERVICES PERFORMED FOR CASH (+A = Dr.)
4. Softbyte SA receives 1,200 cash from customers for app development services
REVENUE (+OE = Cr.) it has performed
TRANSACTION 5. PURCHASE OF ADVERTISING Expense (OE. Dr.) ON CREDIT
(+L=Cr. = AP)
5. Softbyte SA receives a bill for250 from the Programming News for advertising on
its website but postpones payment

Added by Nicole R.

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