Respuesta :
Answer:
Following would be the journal entries:
1. Issue of common stock for cash:
Cash A/C Dr. $20,000
To Common Stock $20,000
(Being common stock issued for cash)
Effect on Accounting Equation:
Issue of stock for cash will increase cash balance by $20,000 and at the same time increase equity balance by $20,000
The equation would become:
A + $20,000 = L + E + $20,000
2. Purchased building for $200,000 cash and $150,000 note:
Building A/C Dr. $350,000
To Cash A/C $200,000
To Note Payable A/C $150,000
(Being building purchased for cash and a note issued for the unpaid balance)
Effect on Accounting Equation:
Building which is an asset, it's purchase would increase the assets side of the equation by total amount i.e $350,000.
Cash which is again an asset, would reduce the asset side of the equation by $200,000
The net effect of the above 2 items will result in an increase to the assets side of equation by $150,000
Notes Payable is a liability and hence it will raise the Liabilities by $150,000.
Thus, the equation would become:
A + 150,000 = L + 150,000 + E
