a. List the accounts impacted by thetransaction. b. For each account, indicate w

Question

a. List the accounts impacted by thetransaction.

b. For each account, indicate whether thetransaction increased or decreased the account.

c. For each account, indicate how much thetransaction increased or decreased the

account.

d. Compute the impact of the transaction ontotal assets, total liabilities, and totalowners’

equity.

Impact of aTransaction

The company borrowed $85,000 in cash fromEastern Bank.

Impact of aTransaction

The company used $45,000 in cash to purchase landon the west side of Hatu Lake

Explanation / Answer

A. 1 Cash and Loan from Eastern Bank 2 Land and Cash B 1 Increased both accounts 2 Increased land but decreased Cash account C Cash account increased by 40000 Loan and Land account increased by 85000 and 45000. D Total assets = cash 40000 + land 45000                  = 85000 Total Liabilities = loan 85000

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