Determining Financial Statement Effects of Several Transactions
The following events occurred for Christensen Company:
a. Received investment of $34,000 cash by organizers and distributed stock to them.
b. Purchased $8,000 of equipment, paying $1,000 in cash and signing a note for the rest.
c. Borrowed $9,000 cash from a bank.
d. Loaned $500 to an employee who signed a note.
e. Purchased $15,000 of land; paid $4,000 in cash and signed a mortgage note for the balance.
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:
Event Assets = Liabilities + Stockholders’ Equity