Determining Financial Statement Effects of Several Transactions
For each of the following transactions of Pitt Inc. for the month of January 2012, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided.
a. (Sample) Borrowed $20,000 from a local bank.
b. Lent $7,000 to an affiliate; accepted a note due in one year.
c. Sold additional stock to investors for $1,000 cash.
d. Purchased $15,000 of equipment, paying $6,000 cash and the rest on a note due in one year.
e. Declared and paid $2,000 in dividends tostockholders.

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Stockholders' Equity Assets Liabilities a. Sample: Cash Notes Payable +20,000 +20,000