PA$10-1($Static$)$ Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt$-$to$-$Assets Ratio $[$LO $10-2,$ LO $10-5]$

Jack Hammer Company completed the following transactions. The annual accounting period ends December $31.$

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April $30$Received $$600,000$ from Commerce Bank after signing a $12-$month, $6$ percent, promissory note.June $6$Purchased merchandise on account at a cost of $$75,000.($Assume a perpetual inventory system.$)$July $15$Paid for the June $6$ purchase.August $31$Signed a contract to provide security service to a small apartment complex starting in September, and collected six months$$ fees in advance, amounting to $$24,000.$December $31$Determined salary and wages of $$40,000$ were earned but not yet paid as of December $31($ignore payroll taxes$).$December $31$Adjusted the accounts at year$-$end, relating to interest.December $31$Adjusted the accounts at year$-$end, relating to security service.

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Required:

For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation.

For each item, indicate whether the debt$-$to$-$assets ratio is increased or decreased or there is no change. $($Assume Jack Hammer$$s debt$-$to$-$assets ratio is less than $1\mathrm{.}0.)$