Goldstar Communications was organized on December 1 of the current year and had the following account balances at December 31, listed in tabular form:

Early in January, the following transactions were carried out by Goldstar Communications:
1. Sold capital stock to owners for $35,000.
2. Purchased land and a small office building for a total price of $90,000, of which $35,000 was the value of the land and $55,000 was the value of the building. Paid $22,500 in cash and signed a note payable for the remaining $67,500.
3. Bought several computer systems on credit for $9,500 (30-day open account).
4. Obtained a loan from Capital Bank in the amount of $20,000. Signed a note payable.
5. Paid the $28,250 account payable due as of December 31.
Instructions
a. List the December 31 balances of assets, liabilities, and owners€™ equity in tabular form as shown.
b. Record the effects of each of the five transactions in the format illustrated in Exhibit 2€“11 .
Show the totals for all columns after eachtransaction.

Transcribed Image Text:

Owners' Assets Liabilities +Equity Office Notes Accounts Cash Land Building Equipment Payable Payable Capital Stock Balances $37,000 $125,000 $51,250 $80,000 $28,250 $200,000