Lane Kohler opened a law office, which he operates as a professional corporation. The name of the new entity is Lane Kohler, Attorney and Counselor, Professional Corporation (P.C.). Kohler experienced the following events during the organizing phase of his new business and its first month of operations. Some of the events were personal transactions of the stockholders and did not affect the law practice. Others were transactions that should be accounted for by the business.

Required
1. Classify each of the preceding events as one of the following:
a. A personal transaction of a stockholder, not to be recorded by the business of Lane Kohler, Attorney and Counselor, P.C.
b. A business transaction to be recorded by the business of Lane Kohler, Attorney and Counselor, P.C.
c. A business-related event but not a transaction to be recorded by the business of Lane Kohler, Attorney and Counselor, P.C.
2. Analyze the effects of the preceding events on the accounting equation of the business of Lane Kohler, Attorney and Counselor, P.C. Use a format similar to Exhibit 2-1, Panel B.
3. Record the transactions of the business in its journal. Include an explanation for each entry.

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March 1 Kohler sold 1,000 shares of You Tube stock and received $75,000 cash from his stockbroker 2 Kohler deposited in his personal bank account the $75,000 cash 3 Kohler received $100,000 cash from his former partners in the 5 Kohler deposited $50,000 cash in a new business bank account from sale of the YouTube stock. law firm from which he resigned. titled Lane Kohler, Attorney and Counselor, P.C. The business issued common stock to Kohler 6 A representative of a large company telephoned Kohler and told him of the company's intention to transfer $15,000 of legal business to K The business paid $500 cash for letterhead stationery for the law office. ohler 7 9 The business purchased office furniture. Kohler paid cash of $10,000 and agreed to pay the account pa yable for the remainder, $9,500, within 3 months. Kohler finished court hearings on behalf of a client and submitted his bill for legal services, $3,000. He expected to collect from this client within 1 month The business paid $5,000 of its account payable on the furniture purchased on March 9 The business paid office rent of $1,900. The business declared and paid a cash dividend of $1,000 23 29 30 31