Bond Terms 8%, 20-year bond, Face Value: $500,000 Interest Payment dates, June 30 and December 31 Bond issued on 1/1/2020 Under
1 answer:
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Answer:
Part a
Assets Liabilities Owners Equity
Balances $308,250 $108,250 $200,000
Part b
Transaction # Assets Liabilities Owners Equity
1 + $35,000 (Cash) nill + $35,000 (Capital)
2 + $35,000 (Land) +67,500 (Note Payable) nill
+ $55,000(Buildings)
- $22,500 (Cash)
3 + $9,500 (Office Equi) + $9,500 (Acco Payable) nill
4 +$20,000 (Cash) +$20,000(Note Payable) nill
5 - $22,250 (Cash) -$20,000(Acco Payable) nill
Explanation:
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Part a
Here simply calculated the totals of Assets, Liabilities and Owners Equity at December 31.
Part b
Remember for every transaction, there are two or more accounts affected. To find the effect of transactions, the first step is to identify the the Accounts affected and the amounts to effect these accounts. Determine if the Account is being increased or decreased. Lastly record the effect as required under the Element of Assets, Liabilities and Equity.
