Analyzing transactions and preparing financial statements. Given the following transactions, (LO 3)

1. Leticia Shettle started a business, Exotic Travel Planners, by contributing \(\$ 5,000\) on July 1, 2010, in exchange for common stock.

2. The company borrowed \(\$ 3,000\) from the bank in July. The note is a 1 -year, \(10 \%\) note, with both principal and interest to be repaid on June 30,2011 .

3. The company earned \(\$ 1,085\) in cash revenue during July.

4. The company paid operating expenses of \(\$ 725\) for the month of July.

5. The company made distributions to owners in the amount of \(\$ 55\) in July.

6. At the end of July, \(\$ 25\) of interest payable is due on the note from \#2.

\section*{Required}

a. Show how each transaction affects the accounting equation.

b. Prepare the four basic financial statements for the month of July (balance sheet at July 31 ).

c. Give one additional piece of information related to the transactions that could be recorded in an information system for a purpose other than the financial statements.