Assume Downcom was organized on May 1 to compete with Despai

Assume Down.com was organized on May 1, to compete with Despair.com-a company that sells de- motivational posters and office products. The following events occurred during the first month of Down.com\'s operations. a. b. c. d. e. Received $39,000 cash from the investors who organized Down.com Corporation. Borrowed $18,000 cash and signed a note due in two years. Ordered equipment costing $21,000. Purchased $9,000 in equipment, paying $3,000 in cash and signing a six-month note for the balance. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

Solution

**order of equipment is not a financial transaction to be recorded in books.

	Assets	=	Liabilities	+	stockholders equity
	cash	Equipment		Accounts payable	ST note payable	LT note payable		common stock
Beg	0	0		0	0	0		0
a	39000							39000
b	18000					18000
c	0	0		0	0	0		0
d	-3000	9000			6000
e	-10500	21000		10500     [21000*1/2]
end	43500	30000		10500	6000	18000		39000