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Masja [62]
3 years ago
14

O’Connor Company ordered a machine on January 1 at a purchase price of $100,000.

Business
1 answer:
Arte-miy333 [17]3 years ago
7 0

Answer and Explanation:

The effect of each transaction is shown below:-

                                    Accounting equation

               Assets =                       Liabilities (+)                      Equity

1 Jan        No effect                        No effect                       No effect

2 Jan      Cash       -$25,000     Notes payable  $75,000

              Machine  +$100,000

3 Jan      Cash        -$1,000

              Machine   +$1,000

5 Jan      Cash        -$6,000

              Machine   +$6,000

Here, + sign indicates the increase in amount and - sign indicated the decrease in amount.

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