Question

The following events occurred for Mitka Ltd.:
a. Received investment of $ 32,000 cash by organizers.
b. Purchased land for $ 18,000 in land; paid $ 6,000 in cash and signed a mortgage note with a local bank for the balance (due in five years).
c. Borrowed cash from a bank and signed a note for $ 11,000.
d. Lent $ 300 to an employee who signed a note due in three months.
e. Paid the bank the amount borrowed in (c).
f. Purchased $ 8,000 of equipment, paying $ 4,000 in cash and signing a note due to the manufacturer.
Required:
For each of the events (a) through (f), perform transaction analysis and indicate the account, amount, and direction of the effects (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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  • CreatedAugust 04, 2015
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