Question

3 E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for Johnson Company: 5 points Skipped a. Received investment of cash by organizers and distributed to them 1,140 shares of $1 par value common stock with a market price of $20 per share. b. Purchased $7,800 of equipment, paying $1,300 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $14,000 cash from a bank. d. Loaned $1,000 to an employee who signed a note. e. Purchased $20,363 of land; paid $7,000 in cash and signed note for the balance. eBook Hint Print References Required: 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. (If no impact on accounting equation leave cells blank.) Event Assets Liabilities + Stockholders' Equity a. b. c. d.

Answer 1

Event	Assets	=	Liabilities	+	Equity
a	Cash	22,800	=			+	Common Stock	1,140
			=			+	Additional Paid up Capital	21,660
b	Equipment	7,800	=	Accounts Payable	6,500	+
	Cash	(1,300)	=			+
c	Notes Receivable	1,000	=			+
	Cash	(1,000)	=			+
d	Land	20,363	=	Notes Payable	13,363	+
	Cash	(7,000)	=			+
			=			+