Analyzing the Effects of Transactions in T-AccountsGranger Service Company. Inc.. was orga...

Analyzing the Effects of Transactions in T-Accounts

Granger Service Company. Inc.. was organized by Ted Granger and five other investors. The following activities occurred during the year:

a. Received $63,000 cash from the investors: each was issued 1.400 shares of capital stock.

b. Purchased equipment for use in the business at a cost of $20,000: one-fourth was paid in cash and the company signed a note for the balance (due in six months).

c. Signed an agreement with a cleaning service to pay S120 per week for cleaning the corporate offices.

d. Received an additional contribution from investors who provided $4,000 in cash and land valued at $13,000 in exchange for stock in the company.

e. Lent $2,500 to one of the investors who signed a note due in six months.

f Ted Granger borrowed $10,000 for personal use from a local bank, signing a one-year note.

Required:

1. Create T-accounts for the following accounts: Cash, Note Receivable. Equipment, Land, Note Payable. and Contributed Capital. Beginning balances are $0. For each of the preceding transactions.

record the effects of the transaction in the appropriate T-accounts. Include good referencing and totals for each T-account.

2. Using the balances in the T-accounts, fill in the following amounts for the accounting equation:

3. Explain your response to events (c) and (f).