Question

prove a storage rental facility Required: For the first month of operations, the company had the following transactions. For each transaction, describe the dual effect on the accounting equation. For example, in the first transaction (1) assets increase and (2) stockholders' equity increases. Transactions Dual Effect Assets increase and stockholders equity increases 1. Issue 10,000 shares of common stock in exchange for $32,000 in cash 2. Purchase land for $19.000. A note payable is signed for the full amount 3. Purchase storage container equipment for $8,000 cash. 4. Hire three employees for $2,000 per month 5. Receive cash of $12,000 in rental fees for the current month. 6. Purchase office supplies for $2,000 on account 7. Pay employees $6,000 for the first month's salaries.

Answer 1

Accounting equation shows the dual effects. + sign shows increase and - shows decrease

Transaction Description	Cash ($)	Equipment ($)	Land ($)	Supplies ($)	=	Accounts Payable ($)	Note Payable ($)	Capital ($)	(+) Revenue ($)	(-) Expenses ($)
received cash from ownership	32000 (+)							32000 (+)
purchased land with note payable			19000 (+)				19000 (+)
purchase of equipment for cash	8000 (-)	8000 (+)
rental fee received in cash	12000 (+)								12000 (+)
office supplies purchased on account				2000 (+)		2000 (+)
employees salaries paid	6000 (-)									6000 (-)
balance	30000	8000	19000	2000		2000	19000	32000	12000	-6000

Transaction	Dual effect
1	assets increase and shareholders equity increases
2	land (assets) increase and notes payable (notes payable) will increase
3	cash (assets) decreases and equipment (assets) increases
4	no entry
5	cash (assets) increases and equity will increase
6	supplies (assets) increases and accounts payable (liabilities) increases
7	cash (assets) decreases and equity decreases