Transactions will be recorded as follows;
<u>1. Borrowed by issuing bonds.
</u>
Dr Cash $61,000 (increase assets
)
Cr Bonds Payable $61,000 (increase liabilities)
<u>2. Paid cash dividend to stockholders.</u>
Dr Retained Earnings $9,350 (decrease equity)
Cr Cash $9,350 (decrease assets)
<u>3. Received cash from a previously billed customer for services provided.
</u>
Dr Cash $18,800 (increase assets)
Cr Accounts Receivable $18,800 (decrease assets)
<u>4. Purchased supplies on account.</u>
Dr Supplies $4,800 (increase assets)
Cr Accounts Payable $4,800 (increase liabilities)
<u>Effects of above mentioned entries on Accounting Equation</u>
Assets = Liabilities + Equity
($61,000-$9,350+$18,800-$18,800+$4,800) = ($61,000+$4,800) + (-$9,350)
$56,450 = $65,800 - $9,350
$56,450 = $56,450
