1. Borrowed $5,000 from the bank by signing a note.
2. Paid $3,100 cash for a computer.
3. Purchased $850 of supplies on account.

Instructions

1. Indicate what accounts are increased and decreased by each transaction.
2. Journalize each transaction. (Omit explanations.)

Solution

1. Cash increases and Note Payable increases
2. Equipment increases and Cash decreases
3. Supplies increases and Accounts Payable increases