Indicate the effects of the transactions below on the balance sheet equation using the following format:

(1) Five thousand shares of $10-par value common stock are issued at par value for cash.
(2) Merchandise is purchased on account for $24,300.
(3) Store equipment is purchased for $4,800. A check is drawn for $1,000 and the balance is payable over 3 years under an installment contract.

(4) Store supplies costing $650 are purchased for cash.

(5) A 60-day promissory note is issued to the supplier in (2) for the amount due.
(6) A check is issued for $600 covering 2 months’ rent in advance on office space.

Transcribed Image Text:

Transaction Number Assets (1) +$50,000 Liabilities + Owners' Equity +$50,000 Subtotal $50,000 $50,000