Master Mind Games, Inc. is a new corporation started on January 1, 2015. The following transactions occurred during the first year of operations.
a. On January 1, 2015, the owners invested a total of $ 50,000 (the par value of the stock) to start the Company. In exchange, the corporation issued the owners 5,000 shares of common stock.
b. On March 14, 2015, the company paid cash to purchase office equipment for $ 10,000.
c. On April 6, 2015, the company obtained a note from the bank for $ 100,000.
d. On May 31, salaries were accrued for time worked in May in the amount of $ 12,000. These salaries will be paid in June.
e. On June 15, 2015, the company paid cash to employees for salaries accrued on May 31.
f. On July 12, 2015, the company paid cash for legal fees associated with the startup of the company in the amount of $ 5,000.
g. On September 6, 2015, the company sold $ 32,000 of merchandise to a large customer. The customer paid cash for half of the transaction and put the other half on its credit account with the vendor (ignore the inventory and cost of goods sold entry of this transaction).
h. On November 1, 2015, the customer that purchased goods on September 6 paid off its credit account balance of $ 16,000 with cash.
i. On December 14, 2015, the company made a $ 10,000 cash payment towards its outstanding bank note balance.
Required
a. Show the effect of each transaction on assets, liabilities, and equity using the accounting equation.
b. Prepare the journal entry for each transaction. .