Considering the text provided, create a balance sheet and income statement for the first 2 years of an imaginary business.
 

As first step, you decide, like Anna Rodriguez, to create a business. You start with an certain amount of equity, in her case $2500 but it can be any amount you think is reasonable in your case. Then, you have to imagine how your business will operate during the first year. You think about the operations you will have during the first year and you devise your first income statement and balance sheet at the end of year 1. Then, you start again for the second year. Normally, you should have some changes in the balance sheet at the beginning of the second year. For example, if you have made profit during the first year, your equity increases if you decide to let the money in the business. The remaining amount of loan is lower if you reimbursed one part of it during the first year.