Enter each transaction below into the accounting equation. Then, calculate (1) the amount of assets owned by Tommy’s Irish Pub, Inc., at the end of its first month of business, and (2) the amount of net income for the month. All these transactions took place during the first 30 days of business.
1. Tommy started the pub by contributing $17,000 in exchange for common stock, and the business borrowed $12,750 from the bank.
2. The pub purchased $4,000 worth of beer and other items (its inventory) with cash.
3. The pub hired a bartender to assist Tommy and help run the new company. For this service, the pub paid $100 each day for 30 days.
4. The pub was popular with the local college and sold half of its inventory for total cash revenues of $8,500.
5. The pub paid rent expense of $725 the first month.
6. The pub repaid $1,500 of the bank loan along with $50 of interest for the first month.