For each of the events (a) though (e), perform transaction analysis and indicate the account, amount,...

Transcribed Image Text:

For each of the events (a) though (e), perform transaction analysis and indicate the account, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm issued 10,000 additional shares of common stock with a par value of $0.05 per share at a market value of $2 per share, receiving $20,000 in cash from investors. (b) The Firm purchased $3,500 of equipment, paying $400 in cash and owing the rest on accounts payable to the manufacturer. (c) The Firm borrowed $3,000 from its local bank, signing a note to be paid in five years. (d) The Firm's board of directors declared that the Firm will pay $2,500 in cash as dividends to shareholders next year. For each of the events (a) though (e), perform transaction analysis and indicate the account, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm issued 10,000 additional shares of common stock with a par value of $0.05 per share at a market value of $2 per share, receiving $20,000 in cash from investors. (b) The Firm purchased $3,500 of equipment, paying $400 in cash and owing the rest on accounts payable to the manufacturer. (c) The Firm borrowed $3,000 from its local bank, signing a note to be paid in five years. (d) The Firm's board of directors declared that the Firm will pay $2,500 in cash as dividends to shareholders next year.

Answer rating: 100% (QA)

a Issuing additional shares of common stock would increase the equity of the company by 20000 ... View the full answer