South Pacific Company was started in 2007 when it issued a note to borrow \($8,400\) cash. Assume this is the only accounting event that occurred during 2007.

Required:

a. Write an accounting equation, and record the effects of the borrowing transaction under the appro¬ priate general ledger account headings.

b. What is the amount ofnet income reported on the income statement? (Ignore any effects of interest.)

c. Where would the note issue appear on the statement of cash flows?