E28 Analyzing the Effects of Transactions in TAccounts LO24

E2-8 Analyzing the Effects of Transactions in T-Accounts LO2-4 [The following information applies to the questions displayed below. Granger Service Company, Inc., was organized by Ted Granger and five other investors. The following activities occurred during the year: a. Received $75,000 cash from the investors; each was issued 8,900 shares of capital stock with a par value of $.10 per share b. Purchased equipment for use in the business at a cost of $23,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). c. Signed an agreement with a cleaning service to pay $170 per week for cleaning the corporate offices next year. d. Received an additional contribution from investors who provided $3,500 in cash and land valued at $20,000 in exchange for 1,500 shares of stock in the company. e. Lent $3,000 to one of the investors who signed a note due in six months. f. Ted Granger borrowed $7,500 for personal use from a local bank, signing a one-year note.

Solution

Cash Notes receivable Beg.bal 0 Beg.Bal 0 a. 75,000 5,750 b. e. 3,000 d. 3,500 3,000 e. end bal 69,750 end bal 3,000 Equipment Land Beg.Bal 0 Beg.Bal 0 b. 23,000 d. 20,000 End bal 23,000 End. Bal 20,000 Notes payable Common Stock Beg.Bal 0 Beg.Bal 0 17,250 b. 890 a. 150 d. End bal 17,250 End bal 1040 Addittional paid in capital Beg bal 0 74110 a. 23350 d. 97460 end bal Assets 115,750 = liabilities 17,250 + Stockholder\'s Equity 98,500