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The following events occurred for Favata Company: a. Received $15,500 cash from owners and issued stock to them. b. Borrowed $12,500 cash from a bank and signed a note due later this year. c. Bought and received $1,350 of equipment on account. d. Purchased land for $23,000; paid $2,100 in cash and signed a long-term note for $20,900. e. Purchased $8,500 of equipment; paid $2,100 in cash and charged the rest on account. Required:

The following events occurred for Favata Company: a. Received $15,500 cash from owners and issued stock to them. b. Borrowed $12,500 cash from a bank and signed a note due later this year. c. Bought and received $1,350 of equipment on account. d. Purchased land for $23,000; paid $2,100 in cash and signed a long-term note for $20,900. e. Purchased $8,500 of equipment; paid $2,100 in cash and charged the rest on account. Required:

FINANCIAL ACCOUNTING
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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The following events occurred for Favata Company: a. Received $15,500 cash from owners and issued stock to them. b. Borrowed $12,500 cash from a bank and signed a note due later this year. c. Bought and received $1,350 of equipment on account. d. Purchased land for $23,000; paid $2,100 in cash and signed a long-term note for $20,900. e. Purchased $8,500 of equipment; paid $2,100 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the accounting equation. (Enter any decreases to account balances with a minus sign.) Event a b C. d. d. e. e. Assets = = = Liabilities + + + Stockholders' Equity
Transcribed Image Text:The following events occurred for Favata Company: a. Received $15,500 cash from owners and issued stock to them. b. Borrowed $12,500 cash from a bank and signed a note due later this year. c. Bought and received $1,350 of equipment on account. d. Purchased land for $23,000; paid $2,100 in cash and signed a long-term note for $20,900. e. Purchased $8,500 of equipment; paid $2,100 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the accounting equation. (Enter any decreases to account balances with a minus sign.) Event a b C. d. d. e. e. Assets = = = Liabilities + + + Stockholders' Equity
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