Question

Analyzing and journalizing transactions

As the manager of Margarita Mexican Restaurant, you must deal with a variety of business transactions. Provide an explanation for the following transactions:

a. Debit Equipment and credit Cash.

b. Debit Dividends and credit Cash.

c. Debit Wages Payable and credit Cash.

d. Debit Equipment and credit Common Stock.

e. Debit Cash and credit Unearned Revenue.

f. Debit Advertising Expense and credit Cash.

g. Debit Cash and credit Service Revenue

Short answer

If an asset, expenses are increased, and equity, liability and revenue are decreased, then the account is debited and vice-versa. A detailed explanation of the answer is given in step 2.

Step-by-step solution

Definition of Service Revenue

Service revenues are defined as the amount earned by a business in exchange for services.

Explanations of transactions

Transactions	Explanation
a.	Purchase of equipment using cash
b.	Cash dividends are paid
c.	Wages payable (liabilities) are paid in cash
d.	Common stock issued in exchange for equipment
e.	Cash received for the services not yet provided
f.	Advertising expense incurred and paid in cash
g.	Service revenue is received in cash