Answer to Question #191319 in Accounting for sheila volney

Question

Record the following transactions using the accounting equation and T accounts.

1.Owner contributed $50,000 in cash for company stock.

2.Purchased building for $120,000

Answer 1

Solution:

The accounting equation is as follows:

Assets = Liabilities + Capital

1.). Owner contributed $50,000 in cash for company stock

Assets (Cash account) will increase by $50,000 and Capital will increase by $50,000

The accounting equation will be as follows:

Assets = Liabilities + Capital

+50,000 = 0 + +50,000

 

2.). Purchased building on credit for $120,000

Asset (Building account) will increase by $120,000 and liabilities will increase by $120,000

The accounting equation will be as follows:

Assets = Liabilities + Capital

+120,000 = +120,000 + 0

 

The T accounts will be as follows: