Assume Down.com was organized on May 1, to compete with Despair.com-a company th

Question

Assume Down.com was organized on May 1, to compete with Despair.com-a company that sells de- motivational posters and office products. The following events occurred during the first month of Down.com's operations. a. b. c. d. e. Received $39,000 cash from the investors who organized Down.com Corporation. Borrowed $18,000 cash and signed a note due in two years. Ordered equipment costing $21,000. Purchased $9,000 in equipment, paying $3,000 in cash and signing a six-month note for the balance. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

Explanation / Answer

**order of equipment is not a financial transaction to be recorded in books.

Assets = Liabilities + stockholders equity cash Equipment Accounts payable ST note payable LT note payable common stock Beg 0 0 0 0 0 0 a 39000 39000 b 18000 18000 c 0 0 0 0 0 0 d -3000 9000 6000 e -10500 21000 10500     [21000*1/2] end 43500 30000 10500 6000 18000 39000

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