Soar Inc enters into the following transactions a Stockholde

Soar Inc. enters into the following transactions: a. Stockholders contribute $11,800 cash to a company in exchange for common stock. b. The company purchases $5,900 to buy new equipment by paying cash. c. The company pays $3,180 to suppliers on account. Required: a. Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.) Transaction Analysis Assets Liabilities Stockholders\' Equity 11,800 a. Equipment io. (5,900) (3,180) 3,180

Solution

Please note journal entries first -

Transaction analysis -

Calculation of cash -

Please note all values are in $.

Please comment in case of further clarification required.

Transaction	General Journal	Debit	Credit
a	Cash A/c	11800
	To Common share capital A/c		11800
	(Being share capital issued)
b	Equipment A/c	5900
	To cash A/c		5900
	(Being equipment purchased for cash)
c	Accounts payable Suppliers A/c	3180
	To cash A/c		3180
	(Being Cash paid to supplier)