During the month, a company enters into the following transactions:- Borrows $3,200 of cash from the bank by signing a formal agreement to repay the loan in 2 years.- Buys $4,000 of new equipment on account.- Pays off $2,400 of accounts payable.- Pays off $1,200 of notes payable Required:Part a. Show the effect of these transactions on the basic accounting equation.Part b. Prepare the journal entries that would be used to record the transactions.
What will be an ideal response?
Part a.
| Transaction Analysis | ||||
| Assets | = | Liabilities | +? | Stockholders' Equity |
| Cash | +3,200 | ? | Notes Payable | +3,200 | ? | ? | ? |
| Equipment ? | +4,000 ? | ? | Accounts Payable | +4,000 | ? | ? | ? |
| Cash | -2,400 | ? | Accounts Payable | -2,400 | ? | ? | ? |
| Cash | -1,200 | ? | Notes Payable | -1,200 | ? | ? | ? |
Part b.
| Cash | 3,200 | ? |
| Notes Payable | ? | 3,200 |
| ? | ? | ? |
| Equipment | 4,000 | ? |
| Accounts Payable | ? | 4,000 |
| ? | ? | ? |
| Accounts Payable | 2,400 | ? |
| Cash | ? | 2,400 |
| ? | ? | ? |
| Notes Payable | 1,200 | ? |
| Cash | ? | 1,200 |
You might also like to view...
Job performance standards are ______.
a. performance expectations for each major duty associated with employees’ jobs b. employees’ personal expectations for themselves c. the organization’s long-term goals d. rules to be followed for employee behavior on the job
The Woodland Park Zoo sells exotic animal dung to the public who can then use the dung as garden fertilizer. This is an example of:
a. earned-income activities b. venture philanthropy funding c. performance measurement d. nonfinancial support
Global Capital S.A. is a foreign investor. With respect to the operations of a limited liability company in the United States, Global can
A. become a member, but cannot otherwise participate. B. become a member. C. not become a member, but can participate. D. not become a member or participate.
In the context of foreign direct investment, a partnership typically involves a less formal, less encompassing agreement than a strategic alliance.
Answer the following statement true (T) or false (F)