[Spartain 08]

Regus Corporation is started with authorized capital stock of 10 000 common shares and 100 000 $5 preffered shares.

A In T-accounts post the accounting entries for the following transactions
For the first year of operation.

1. The owner pays $20 000 for 10 000 shares of common stock.
2. 10 000 preferred shares are sold to the general public at $50 a share.
3. Land ($100 000) and a building ($200 000) are purchased for cash.
4. A net income of $88 000 is earned for the year. (Debit Other Assets and credit Retained Earnings.)
5. The preferred dividend is declared.

B Prepare a simple balance sheet for Regus Corporation after transaction 5.

"I don't understand what to do with other assets do I debit it 88 000 and credit Retained Earnings 88 000 I am confused :confused:"

[terryg752]

I am not sure but I think it will be like this:

Any surplus (Net Income) will go Retained Earnings.

Yes, You debit Other assets and Credit Retained Earnings.