Green Wave Company plans to own and operate a storage

Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company had the following transactions.

1. Issue 10,000 shares of common stock in exchange for $32,000 in cash.

2. Purchase land for $19,000. A note payable is signed for the full amount.

3. Purchase storage container equipment for $8,000 cash.

4. Hire three employees for $2,000 per month.

5. Receive cash of $12,000 in rental fees for the current month.

6. Purchase office supplies for $2,000 on account.

7. Pay employees $6,000 for the first month’s salaries.


Required:

For each transaction, describe the dual effect on the accounting equation. For example, in the first transaction,

(1) Assets increase

(2) Stockholders’ equity increases.


Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...