Question

Groro Co. bills a client $62,000 for services provided and agrees to accept the following three items in full payment: (1) $10,000 cash, (2) equipment worth $80,000, and (3) to assume responsibility for a $28,000 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 B Required C Required A Analyze the transaction using the accounting equation Assets Liabilities Equity Cash Equipment Note Payable Revenue 62,000 10,000 80,000 28,000 Required A > Required B Complete this question by entering your answers in the tabs below Required A Required B Required C Prepare general journal entries for the above transactions. View transaction list View journal entry worksheet No Date General Journal Debit Credit Cash May 15 1 10,000 Equipment 80,000 Note payable 28,000 Required C> Required A Complete this question by entering your answers in the tabs below. Required A Required B Required C Post the entry using T-accounts to represent ledger accounts. Cash 101 Note Payable 245 10,000 28000 Revenue 404 Equipment 167 80,000 80000 62000 62,000 KRequired B Required C

Answer 1

The Basic Principle of financial accounting is the Accounting Equation.

The Accounting Equation is Assets = Liabilities + Equity

Assets are resources controlled by the firm because of past transactions that are expected provide future benefits.

Liabilities are the obligations as a result of past events that are expected require an outflow of economic resources

Equity is the residual interest in the assets of the firm after deducting the liabilities. Equity consists of contributed capital and retained earnings

Assets = Liabilities + Contributed Capital + ending Retained Earnings

Assets = Liabilities + Contributed Capital + Beginning Retained Earnings + Net Income - Dividends

Liabilities | Notes PayableRevenue $80,000 +Equity Ans a Assets Cash +Equipment $10,000 $28,000 $62,000 Journal Entry Date May. 15 Ans b Credit Particulars Cash Equipment Notes Payable Revenue Debit $10,000 $80,000 $28,000 $62,000 Notes Payable 245 $28,000 Cash 101 Ans c $10,000 Equipment 167 $80,000 Revenue 404 $62,000