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Groro Co. bills a client $56,000 for services provided and agrees to accept the

ID: 2332824 • Letter: G

Question

Groro Co. bills a client $56,000 for services provided and agrees to accept the following three items in full payment: (1) $30,000 cash, (2) equipment worth $63,000, and (3) to assume responsibility for a $37,000 note payable related to the equipment. (a) Analyze the transaction using the accounting equation. (b) Prepare general journal entries for the above transactions (c) Post the entry using T-accounts to represent ledger accounts. Complete this question by entering your answers in the tabs below Required A Required B Required C Analyze the transaction using the accounting equation. Liabilities Equity Note Payable Assets Cash Equipment Revenue Required A Required B>

Explanation / Answer

Requirement A

Accounting equation

Assets

Liabilities

Equity

Cash

Equipment

=

Notes payable

Revenue

$ 30,000.00

+

$ 63,000.00

=

$       37,000.00

+

$ 56,000.00

Requirement B

Journal entry for the Transaction

Date

General Journal

Debit

Credit

15-May

Cash

$ 30,000.00

Equipment

$ 63,000.00

         Notes Payable

$ 37,000.00

          Service Revenue

$ 56,000.00

(Service rendered in exchange of cash and equipment )

Requirement C

T Accounts

Cash 101

$ 30,000.00

Note Payable 245

$ 37,000.00

Equipment 167

$ 63000

Revenue 404

$ 56000

Normal Balance

Cash (Dr)$ 30000

Equipment (Dr) $ 63000

Notes Payable (Cr) $ 37000

Revenue (Cr) $ 56000

Accounting equation

Assets

Liabilities

Equity

Cash

Equipment

=

Notes payable

Revenue

$ 30,000.00

+

$ 63,000.00

=

$       37,000.00

+

$ 56,000.00