**Educational Content: Organization of Transaction Data****Overview:**In this exercise, we examine how to organize transaction data in accounts under the accounting equation for Doyle Company in Year 2 and Year 3. The focus is on understanding the financial impact of a bond issuance and subsequent investment.**Background Information:**Doyle Company issued $310,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle invested the proceeds in land, generating $59,000 in annual cash revenue from leased land, collected every December 31, starting at the end of Year 2.**Task:**You are to organize these events in the accounting equation format, accounting for assets, liabilities, and stockholders' equity. Note how each transaction impacts these accounts, using a minus sign for any reductions.**Table Explanation:**The provided table is to help visualize the impact of events on the accounting equation.**Year 2 Events:**- **1/1:** - **Assets**: Record cash received from bond issuance and investment in land. - **Liabilities**: Reflect bond payable. - **Stockholders' Equity**: No immediate change. - **12/31 (Twice):** - **Assets**: Include cash revenue from the land lease. - **Liabilities**: Account for interest payable. - **Stockholders' Equity Account Titles for Retained Earnings**: Reflect earned interest revenue.**Year 3 Events:**- **Beginning, 12/31, Ending Balances:** - Repeat similar transactions for continuity and consistency in accounts.Remember that not every cell requires input. Focus on aligning numerical changes with account impacts. Inputs to "Account Titles for Retained Earnings" depend on transactional changes impacting stockholders' equity.

Accounting equation reflects the impact of a transaction that brings changes the in net financial…

Doyle Company issued $310,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $59,000 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2. Required a. Organize the transaction data in accounts under the accounting equation for Year 2 and Year 3. Note: Enter any decreases to account balances with a minus sign. Not all cells in the "Account Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding input needed. 1/1 1/1 Event Year 2 12/31 12/31 Balance Year 3 Beginning balance 12/31 12/31 Ending balance Cash Assets + + + + + 0 + 0 + +++ 0 + DOYLE COMPANY Effect of Events on the Accounting Equation Year 2 and Year 3 Land 0 0 0 = = = = = = = = Liabilities Bonds Payable 0 + 0 + + + + 0 + + + + + + Stockholders' Equity Retained Earnings 0 0 0 Account Titles for Retained Earnings

Doyle Company issued $310,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $59,000 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2. Required a. Organize the transaction data in accounts under the accounting equation for Year 2 and Year 3. Note: Enter any decreases to account balances with a minus sign. Not all cells in the "Account Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding input needed. 1/1 1/1 Event Year 2 12/31 12/31 Balance Year 3 Beginning balance 12/31 12/31 Ending balance Cash Assets + + + + + 0 + 0 + +++ 0 + DOYLE COMPANY Effect of Events on the Accounting Equation Year 2 and Year 3 Land 0 0 0 = = = = = = = = Liabilities Bonds Payable 0 + 0 + + + + 0 + + + + + + Stockholders' Equity Retained Earnings 0 0 0 Account Titles for Retained Earnings

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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