Les Stanley established an insurance agency on July 1, 20Y5, and completed the following transactions during July: Opened a business bank account in the name of Stanley Insurance Inc., with a deposit of $65,000 in exchange for common stock. Borrowed $120,000 by issuing a note payable. Received cash from fees earned, $40,000. Paid rent on office and equipment for the month, $5,000. Provided service to customers on account, $ 20,000. Paid automobile expense for the month, $3,500, and miscellaneous expense, $1,000. Paid office salaries, $6,500. Paid interest on the note payable, $500. Purchased land as a future building site, paying cash of $100,000. Paid dividends, $3,000. Instructions Indicate the effect of each transaction and the balances after each transaction, using the integrated financial statement framework

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Les Stanley established an insurance agency on July 1, 20Y5, and completed the following transactions during July:

  1. Opened a business bank account in the name of Stanley Insurance Inc., with a deposit of $65,000 in exchange for common stock.
  2. Borrowed $120,000 by issuing a note payable.
  3. Received cash from fees earned, $40,000.
  4. Paid rent on office and equipment for the month, $5,000.
  5. Provided service to customers on account, $ 20,000.
  6. Paid automobile expense for the month, $3,500, and miscellaneous expense, $1,000.
  7. Paid office salaries, $6,500.
  8. Paid interest on the note payable, $500.
  9. Purchased land as a future building site, paying cash of $100,000.
  10. Paid dividends, $3,000.

Instructions

Indicate the effect of each transaction and the balances after each transaction, using the integrated financial statement framework

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