Soar Inc. enters into the following transactions: a. Stockholders contribute $11

Question

Soar Inc. enters into the following transactions: a. Stockholders contribute $11,800 cash to a company in exchange for common stock. b. The company purchases $5,900 to buy new equipment by paying cash. c. The company pays $3,180 to suppliers on account. Required: a. Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.) Transaction Analysis Assets Liabilities Stockholders' Equity 11,800 a. Equipment io. (5,900) (3,180) 3,180

Explanation / Answer

Please note journal entries first -

Transaction analysis -

Calculation of cash -

Please note all values are in $.

Please comment in case of further clarification required.

Transaction General Journal Debit Credit a Cash A/c 11800 To Common share capital A/c 11800 (Being share capital issued) b Equipment A/c 5900 To cash A/c 5900 (Being equipment purchased for cash) c Accounts payable Suppliers A/c 3180 To cash A/c 3180 (Being Cash paid to supplier)

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