The following events occurred for Favata Company a Received 10 000
The following events occurred for Favata Company:
a. Received $ 10,000 cash from owners and issued stock to them.
b. Borrowed $ 7,000 cash from a bank and signed a note due later this year.
c. Bought and received $ 800 of equipment on account.
d. Purchased land for $ 12,000; paid $ 1,000 in cash and signed a long- term note for $11,000.
e. Purchased $ 3,000 of equipment, paid $ 1,000 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 (1 for increase and 2 for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. Use the following headings:
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