The following events occurred for Johnson Company:

a. Received investment of $40,000 cash by organizers and distributed 1,000 shares of $1 par value common stock to them.

b. Purchased $15,000 of equipment, paying $3,000 in cash and signing a note for the rest.

c. Borrowed $10,000 cash from a bank.

d. Loaned $800 to an employee who signed a note.

e. Purchased $13,000 of land; paid $4,000 in cash and signed a mortgage note for the balance.

Required:

For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. Use the followingheadings:

Transcribed Image Text:

Event Assets Liabilities + Stockholders' Equity