Question

n. 1,2,3 1 Saved Help Save & Exit Submit Groro Co. bills a client $55,000 for services provided and agrees to accept the following three items In full payment: (1) $17,000 cash, (2) equipment worth $59,000, and (3) to assume responsibility for a $21,000 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. - Assets - Cash Equipment 17,000 + 59,000 - Liabilities Note Payable 21.000 Equity Revenue Required > < Prev 41 of 63 Next >

Answer 1

Question a

Company has provided services of $55,000 so it has to recognize the revenue of $55,000 which will increase its equity by $55,000. Cash and equipment are assets and notes payable is liabilities.

Question b

Asset = Cash + Equipment = 17,000 + 59,000 = Liabilities + Equity Note payable + Revenue 21,000 + 55,000

Journal entry is as below:

Question c

Date Journal entry in the books of Groro Co. Particulars Debit ($) Credit ($) Cash A/c ------ Dr 17000 Equipment A/c --------- Dr 59000 To, Sales revenue A/c 55000 To, Note payable A/c 21000 (being services provided and cash and equipment received and notes payable accepted as consideration)

Cash Beg. Bal 17,000 End Bal 17,000 17,000 17,000 Equipment Beg. Bal 59,000 End bal 59,000 59,000 59,000 Notes payable Beg. Bal 21,000 End bal 21,000 21,000 21,000 Sales revenue Beg. Bal 55,000 End bal 55,000 55,000 55,000