Reference no: EM132950805

On April 1, Julie Spengel established Spengel's Travel Agency. The following transactions were completed during the month:

• Invested $20,000 cash to start the agency
• Paid $600 cash for April office rent expense.
• Purchased equipment for $3,000 cash.
• Incurred $700 of advertising expense in the Chicago Tribune, on account.
• Paid $900 cash for office supplies.
• Performed services worth $10,000 on account.
• Withdrew $600 cash for personal useRequirements:

After recording the transactions in the worksheet, answer the following question:

Problem 1: The effect of tran. 1 on the accounting equation is:

a. $20,000 decrease in cash and $20,000 decrease in capital.

b. $20,000 decrease in cash and $20,000 increase in capital.

c. $20,000 increase in cash and $20,000 increase in capital.