Below is a list of activities.TransactionAssets=Liabilities+Stockholders' Equity1. Obtain a loan at the bankIncrease=Increase+No Effect2. Issue common stock to stockholders for cash.?????3. Purchase equipment for cash.?????4. Pay cash for insurance in advance.?????5. Pay cash for employees' salaries in the current period.?????6. Pay accounts payable.?????7. Purchase office supplies on account.?????8. Provide services to customers for cash.?????9. Provide services to customers on account.?????10. Pay cash dividends to stockholders.?????11. Pay cash for utilities in the current period.?????Required:For each activity, indicate whether the transaction increases, decreases, or has no effect on
assets, liabilities, and/or stockholders' equity.
What will be an ideal response?
| Transaction | Assets | = | Liabilities | + | Stockholders' Equity |
| 1. Obtain a loan at the bank. | Increase | = | Increase | + | No effect |
| 2. Issue common stock to stockholders for cash. | Increase | = | No effect | + | Increase |
| 3. Purchase equipment for cash. | No effect* | = | No effect | + | No effect |
| 4. Pay cash for insurance in advance. | No effect* | = | No effect | + | No effect |
| 5. Pay cash for employees' salaries in the current period. | Decrease | = | No effect | + | Decrease |
| 6. Pay accounts payable. | Decrease | = | Decrease | + | No effect |
| 7. Purchase office supplies on account. | Increase | = | Increase | + | No effect |
| 8. Provide services to customers for cash. | Increase | = | No effect | + | Increase |
| 9. Provide services to customers on account. | Increase | = | No effect | + | Increase |
| 10. Pay cash dividends to stockholders. | Decrease | = | No effect | + | Decrease |
| 11. Pay cash for utilities in the current period. | Decrease | = | No effect | + | Decrease |
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