Chapter 3 Lecture Problems

Chapter 3 Lecture Problems - Chapter 3 Exercise 3 (A) The...

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Chapter 3 – Exercise 3 (A) The following economic events relate to a corporation that operates as a law firm. a. Complete the following table by indicating the amount and effect of each transaction (+ or -) on the accounting equation. b. Prepare the journal entries for each of the transactions. Transaction Asset Liability Shareholders’ Equity A) Issued shares for $25,000 of cash. + $25,000 + $25,000 Transaction Account debit credit A) Cash $25,000 Share capital $25,000 Journal entry:
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Chapter 3 – Exercise 3 (B) B) Borrowed $50,000 from a local bank in exchange for a promissory note due in one year. Transaction Asset Liability Shareholders’ Equity B) Transaction Account debit credit B) Journal entry:
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Chapter 3 – Exercise 3 (C) C) Signed a lease and made a payment of $4,500 to the landlord comprised of the current month’s rent of $1,500 and the required $3,000 security deposit. Transaction Asset Liability Shareholders’ Equity C) Transaction Account debit credit C) Journal entry:
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(D) D) Purchased equipment on account for $35,000. Transaction
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This note was uploaded on 10/21/2010 for the course AFM 101 taught by Professor Kennedy during the Winter '08 term at Waterloo.

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Chapter 3 Lecture Problems - Chapter 3 Exercise 3 (A) The...

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