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Principles of Financial Accounting - ACCT 201 Case Study Applying the accounting cycle Sarah Automotive On October 2018 , Sarah began a car repair shop, Sarah Automotive. The following information about transactions from October to December 2018 Transactions: Oct 1, Sarah invested $50,000 cash to the business in exchange for capital. 1. Nov 5, Purchased land to be used in operations for $20,000 cash. 2. Nov 10, Purchased$12,000 of equipment paying cash 3. Dec 1, Paid $4,500 for a 9-month insurance policy starting on December 1. 4. Dec 4, Borrowed $30,000 from the bank for business use. Sarah signed a note payable to the bank in the name of the business. 5. Dec 8, Purchased office supplies on account, $3,000. 6. Dec 30, Revenues earned during December included $20,500 cash and $2,700 on account 7. The business received a bill for utilities to be paid in January, $260. 8. Paid employees' salaries $4,800 and building rent $800, Record as a compound entry 9. The business received $2,440 for services to be performed next month. 10. Sarah Automotive paid dividends of $4,000 cash . Additional information: . Office Supplies used during the month, $600. . The company uses straight line depreciation method and estimates that the equipment will have a useful life of 5 years . . One-month insurance has expired. . Accrued Interest Expense, $75