The following events occurred for Favanta Company:

a. Received $10,000 cash from owners and issued shares to them.

b. Borrowed $7,000 cash from a bank and signed a note due later this year.

c. Purchased land for $12,000; paid $1,000 in cash and signed a note for the $11,000.

d. Bought and received $800 of equipment on account.

e. Purchased $3,000 of equipment, paying $1,000 in cash and charged the rest on account.

Required:

For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. Use the following headings:

Transcribed Image Text:

Shareholders' Equity Event Assets Liabilities