During 2022, its first year of operations as a delivery service, Persimmon Corp. entered into the following transactions. 

1. Issued shares of common stock to investors in exchange for $100,000 in cash. 

2. Borrowed $45,000 by issuing bonds. 

3. Purchased delivery trucks for $60,000 cash. 

4. Received $16,000 from customers for services performed. 

5. Purchased supplies for $4,700 on account. 

6. Paid rent of $5,200. 

7. Performed services on account for $10,000. 

8. Paid salaries of $28,000. 

9. Paid a dividend of $11,000 to shareholders. 

Instructions 

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the right-hand margin. Use Illustration 3.4 as a model. 

Transcribed Image Text:

Stockholders' Equity Retained Earnings Assets Liabilities Bonds Equip- ment = Payable + Payable + Accounts Accounts Common Stock Cash + Receivable + Supplies + Revenues - Expenses Dividends +