Reference no: EM132545290

The owner of Cullumber Company has been doing all of the company's bookkeeping. When the accountant arrived to do the year-end adjusting entries, she found the following items:

1. A payment of salaries of $700 was debited to Equipment and credited to Cash, both for $700.

2. The investment of $2,100 of cash by the owner, Toni Cullumber, was debited to Short-Term Investments and credited to Cash, both for $2,100.

3. The collection of an account receivable of $1,000 was debited to Cash and credited to Accounts Receivable, both for $1,000.

4. The company had purchased $490 of supplies on account. This entry was correctly recorded. When the account was paid, Supplies was debited $490 and Cash was credited $490.

5. Equipment costing $3,600 was purchased on account. Repair Expense was debited and Accounts Payable was credited, both for $3,600.

Question 1: Correct the errors by reversing the incorrect entry and preparing the correct entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)