Jacksonville Business Daily

transactions......?

Answer the following for each transaction: a. List the accounts impacted by the transaction. b. For each account, indicate whether the transaction increased or decreased the account. c. For each account, indicate how much the transaction increased or decreased the account. d. Compute the impact of the transaction on total assets, total liabilities, and total owners’ equity. 1. Impact of a Transaction The company borrowed $85,000 in cash from Eastern Bank. 2. Impact of a Transaction The company used $45,000 in cash to purchase land on the west side of Hatu Lake.

Public Comments

1. a) Name the accounts on which this transaction has effect for e.g Cash account, receivables a/c b) Just disclose whether the impact of transaction is negative or positive for the relevant account c) Amount of the impact on the account d) 1: increase in liability, increase in cash asset no impact on equity 2: Increase in asset i.e land and decrease in cash asset and decrease in owner's equity with the same amount
2. 1. Impact of a Transaction The company borrowed $85,000 in cash from Eastern Bank a. List the accounts impacted by the transaction Dr Cash $85,000 Cr Bank loan $85,000 b. For each account, indicate whether the transaction increased or decreased the account c. For each account, indicate how much the transaction increased or decreased the account Cash - increased $85k Bank loan - increased $85k d. Compute the impact of the transaction on total assets, total liabilities, and total owners’ equity. total assets - increased $85k total liabilities - increased $85k total owners’ equity - no impact, except that interest on the bank loan would go to reduce owner's equity 2. Impact of a Transaction The company used $45,000 in cash to purchase land on the west side of Hatu Lake a. List the accounts impacted by the transaction Dr Land $45k Cr Cash $45k b. For each account, indicate whether the transaction increased or decreased the account. c. For each account, indicate how much the transaction increased or decreased the account Land - increased $45k Cash - decreased $45k d. Compute the impact of the transaction on total assets, total liabilities, and total owners’ equity. total assets - increased and decreased $45k, no net effect total liabilities - no impact total owners’ equity - no impact