PTER 2 EXERCISES Questlon 2 of 15 666 points The following e

PTER 2 EXERCISES Questlon 2 (of 15) 6.66 points The following events occurred for Favata Company a Recelved $17,000 cash from owners and issued stock to them b Borrowed $14,000 cash from a bank and signed a note due later this year c Bought and received 51,500 of equipment on account d Purchased land for $26,000; paid $2,400 in cash and signed a long-term note for $23,600 e. Purchased $10,000 of equipment, paid $2.400 in cash and charged the rest on account Required: For each of the events (a) through (e) perform transaction analysis and indicate the account, amount, and direction of the effect (+for increase and- for decrease) on the accounting equation. (Enter any decreases to account balances with a minus sign.) Hints References eBook & Resources Hint #1

Solution

Assets = Liabilities + Stockholder\'s Equity a. Cash $ 17,000 Common Stock $ 17,000 b. Cash $ 14,000 Notes Payable $ 14,000 c. Equipment $   1,500 Accounts Payable $   1,500 d. Land $ 26,000 Cash $ -2,400 Notes Payable $ 23,600 e. Equipment $ 10,000 Cash $ -2,400 Accounts Payable $   7,600