Chapter 2, Problem 2.7S

(Learning Objective 3: Analyze the impact of business transactions on accounts) Fourth Investments, Inc., began by issuing common stock for cash of $200,000. The company immediately purchased computer equipment on account for $56,000.

1. 1. Set up the following T-accounts of Fourth Investments, Inc.: Cash, Computer Equipment, Accounts Payable, and Common Stock.
2. 2. Record the first two transactions of the business directly in the T-accounts without using a journal.
3. 3. Show that total debits equal total credits.