Bombeck Inc. has the following transactions during August of the current year. Aug. 1 Opens an office as a financial advisor, investing $5,000 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,800 cash. 16 Receives $1,900 from clients for services performed. 27 Pays secretary $1,000 salary. Journalize the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date       Account title and explanation        Debit       Credit

Aug.1      Cash                                                $5,000

                     Common stock                                             $5,000

              [To record cash in exchange for common stock]  

Aug.4      Prepaid insurance                          $1,800  

                     Cash                                                               $1,800

               [To record paid insurance in advance]  

Aug.16       Cash                                              $1,900

                       Service revenue                                           $1,900

                 [To record cash received for services]  

Aug.27      Salaries expense                          $1,000

                       Cash                                                              $1,000

                 [To record cash paid for salaries]

answer; the correct answer to the above statement is (true);