1) The company previously purchased equipment in a previous accounting period for a cost of $758,164. When purchased, the equipment had an expected life of 22 years.
Describe the effects of this transaction on the accounting equation in terms of debits and credits
Assets
758,164
Prepare the appropriate journal entry for this transaction
Account Name
Property, Plant, & Equipment
Cash
Liabilities
Equity
758,164
Debit
Credit
758,164
758,164
2) The company paid $2,688 for insurance on November 30 for the following twenty four months.
Describe the effects of this transaction on the accounting equation in terms of debits and credits
Assets
Liabilities
2,688
2,688
Prepare the appropriate journal entry for this transaction
Account Name
Prepaid Insurance
Debit
Credit
2,688
Cash
$
2,688
Equity
3) The company previously took out a loan from a bank that has a principal balance of $58,966 with an annual interest rate of 5.8%. The company makes an annual payment on this loan every year on February 28.
Describe the effects of this transaction on the accounting equation in terms of debits and credits
Assets
Prepare the appropriate journal entry for this transaction
Account Name
Liabilities
Debit
Credit
4) The company has $16,827 of supplies remaining on hand as of December 31.
Describe the effects of this transaction on the accounting equation in terms of debits and credits
Assets
Prepare the appropriate journal entry for this transaction
Liabilities
Account Name
Supplies Expense
Debit
$
Credit
16,827
Supplies
$
16,827
Equity
Equity