Question

Following are the transactions of JonesSpa Corporation, for the month of January a. Borrowed $21,000 from a local bank. b. Lent $7,700 to an affiliate; accepted a note due in one year. c. Sold to investors 110 additional shares of stock with a par value of $0.10 per share and a market price of $30 per share; received cash. d. Purchased $20,000 of equipment, paying $5,300 cash and signing a note for the rest due in one year. e. Declared $4,300 in cash dividends to stockholders, to be paid in February. For each of the above transactions of JonesSpa Corporation, for the month of January, indicate the accounts, the amounts, and the direction of the effects (+ for increase and - for decrease) on the accounting equation. A sample is provided. Assets Liabilities Stockholders' Equity Notes payable 21,000 a. Cash b. Notes receivable Cash 21,000 7,700 -7,700 c. Cash 3,300 11 Common stock Additional paid-in capital Equipment Cash 20,000 -5,300 e. Dividends payable 4,300 Retained earnings -4,300

Answer 1

+ Stockholders' Equity Liabilities Notes payable $21,000 Assets a Cash b Notes receivable Cash C Cash $21,000 $7,700 $7,700 $3,300 Common stock Additional pad-in capital $11 110*$0.10 $3,289 110*$29.90 Notes payable $14,700 d Equipment Cash $20,000 $5,300 e Dividends payable $4,300 Retained Earnings -$4,300