The following events occurred for Johnson Company:

(a) Received investment of cash by organizers and distributed to them 1,080 shares of $1 par value common stock with a market price of $10 per share.
(b) Purchased $7,900 of equipment, paying $1,100 in cash and owing the rest on accounts payable to the manufacturer. Borrowed $13,000 cash from a bank.
(c) Loaned $500 to an employee who signed a note. Purchased $20,437 of land; paid $8,000 in cash and signed a mortgage note for the balance.

Required:

For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (increase or decrease) on the accounting equation.

(a) Received investment of cash by organizers and distributed to them 1,080 shares of $1 par value common stock with a market price of $10 per share.

(b) Purchased $7,900 of equipment, paying $1,100 in cash and owing the rest on accounts payable to the manufacturer. Borrowed $13,000 cash from a bank.

(c) Loaned $500 to an employee who signed a note. Purchased $20,437 of land; paid $8,000 in cash and signed a mortgage note for the balance.

Required:

Assets = Liabilities + Stockholders’ Equity

a. Cash 10800 Common Stock 1080

Additional paid in capital

9720

b. Equipment 7,900 Notes Payable 6,800

Cash -1100

c. Cash 13,000 Notes Payable 13,000

d. Note receivable 500

Cash -500

e. Land 20,437 Mortgage Notes Payable 12,437

Cash -8,000