Groro Co. bills a client $56,000 for services provided and agrees to accept the
ID: 2332824 • Letter: G
Question
Groro Co. bills a client $56,000 for services provided and agrees to accept the following three items in full payment: (1) $30,000 cash, (2) equipment worth $63,000, and (3) to assume responsibility for a $37,000 note payable related to the equipment. (a) Analyze the transaction using the accounting equation. (b) Prepare general journal entries for the above transactions (c) Post the entry using T-accounts to represent ledger accounts. Complete this question by entering your answers in the tabs below Required A Required B Required C Analyze the transaction using the accounting equation. Liabilities Equity Note Payable Assets Cash Equipment Revenue Required A Required B>Explanation / Answer
Requirement A
Accounting equation
Assets
Liabilities
Equity
Cash
Equipment
=
Notes payable
Revenue
$ 30,000.00
+
$ 63,000.00
=
$ 37,000.00
+
$ 56,000.00
Requirement B
Journal entry for the Transaction
Date
General Journal
Debit
Credit
15-May
Cash
$ 30,000.00
Equipment
$ 63,000.00
Notes Payable
$ 37,000.00
Service Revenue
$ 56,000.00
(Service rendered in exchange of cash and equipment )
Requirement C
T Accounts
Cash 101
$ 30,000.00
Note Payable 245
$ 37,000.00
Equipment 167
$ 63000
Revenue 404
$ 56000
Normal Balance
Cash (Dr)$ 30000
Equipment (Dr) $ 63000
Notes Payable (Cr) $ 37000
Revenue (Cr) $ 56000
Accounting equation
Assets
Liabilities
Equity
Cash
Equipment
=
Notes payable
Revenue
$ 30,000.00
+
$ 63,000.00
=
$ 37,000.00
+
$ 56,000.00
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