Question

How does the payment of rent for equipment affect the accounting equation? assets increase; assets decrease assets decrease; stockholders' equity decreases assets decrease; liabilities increase assets increase; stockholders' equity increase?

Answer 1

The answer to this question is assets decrease; stockholders' equity decreases 

The journal for this transaction would be

Debit:  Rent expense       xxxxx
Credit:         Cash                                xxxx
 
 Since cash is considered an asset, it will decrease asset if it placed on credit.
 Since expense will reduce net income that will be allocated to stockholders' equity, it will reduce stockholders' equity when placed on debit     

Answer 2

By assets decrease; stock holders' equity decreases the payment of rent for equipment affect the accounting equation.

Further Explanation:

assets decrease:

A business diminishes a benefit account as it uses up or devours the advantage in its activities. Resources a business uses up incorporate money, supplies, debt claims and prepaid costs. For instance, if your private venture pays $100 for a service charge, you would credit money by $100 to diminish the record.  

stock holders:

Investors are individuals who hold stocks — as it were, possess shares — in a company. When you purchase stocks, it resembles purchasing some portion of the organization. The more offers you purchase, the more put you are in an organization.  

equity decreases:

A diminishing in the proprietor's value can happen when an organization loses cash during the typical course of business and proprietors need to move value into ordinary business tasks. It additionally diminishes when a proprietor pulls back cash for individual use.  

accounting equation:

The accounting equation, likewise called the accounting report condition, speaks to the connection between the advantages, liabilities, and proprietor's value of an individual or business. It is the establishment for the twofold passage accounting framework. For every exchange, the all out charges equivalent the complete credits.

Subject: business

Level: High School

Keywords: assets decrease,  stock holders, equity decreases, accounting equation.  

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