Question

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a. (Sample) Borrowed $4,640 from a local bank on a note due in six months. b. Received $5,330 cash from investors and issued common stock to them. c. Purchased $1,700 in equipment, paying $550 cash and promising the rest on a note due in one year. d. Paid $650 cash for supplies. e. Bought and received $1,050 of supplies on account.

Answer 1

Answer:

For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation

Explanation:

a. Borrowed $4,640 from a local bank  4640 Cash bank Increase

 on a note due in six months.                 4640 note payable Increase

b. Received $5,330 cash from investors and 5330 Cash bank Increase

   issued common stock to them.                    5330 Stock Increase

c. Purchased $1,700 in equipment,                  1700 Equipment Increase

paying $550 cash and                                       550 Cash bank Decrease

promising the rest on a note due in one year.1150 Note Payable Increase

d. Paid $650 cash for supplies.                          650 cash bank decrease

supplies                                                                650 supplies Increase

e. Bought and received $1,050                         1050 Supplies Increase

of supplies on account.                                      1050 Accoun Payable Increase