For each of the following transactions of Spotlighter, Inc., for the month of Ja
ID: 2421505 • Letter: F
Question
For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.)
a. (Sample) Borrowed $5,340 from a local bank on a note due in six months.
b. Received $6,030 cash from investors and issued common stock to them.
c. Purchased $2,400 in equipment, paying $900 cash and promising the rest on a note due in one year.
d. Paid $1,000 cash for supplies. e. Bought and received $1,400 of supplies on account
Explanation / Answer
Account title
Debit
Credit
A
Bank
$5340
Note payable
$5340
(Asset= bank increase by 5340 and Liability= Note payable increase by 5340)
B
Cash
$6030
Common stock
$6030
(Asset= cash increase by 6030 and Equity increase by 6030)
c
Equipment
$2400
Cash
$900
Note payable
$1500
(Asset= Fixed asset increase by 2400 and cash decrease by 900 and Liability= Note payable increase by 1500)
D
Supplies
$1000
Cash
$1000
(supplies increase by 1000 and cash decrease by 1000)
E
Supplies
$1400
Account payable
$1400
(supplies increase by 1000 and account payable increase by 1000)
Account title
Debit
Credit
A
Bank
$5340
Note payable
$5340
(Asset= bank increase by 5340 and Liability= Note payable increase by 5340)
B
Cash
$6030
Common stock
$6030
(Asset= cash increase by 6030 and Equity increase by 6030)
c
Equipment
$2400
Cash
$900
Note payable
$1500
(Asset= Fixed asset increase by 2400 and cash decrease by 900 and Liability= Note payable increase by 1500)
D
Supplies
$1000
Cash
$1000
(supplies increase by 1000 and cash decrease by 1000)
E
Supplies
$1400
Account payable
$1400
(supplies increase by 1000 and account payable increase by 1000)
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