Set up T-accounts for the following accounts, indicate whether each account is an asset, liability, or owners’ equity item, and enter the transactions described below:

(1) Twenty thousand shares of $10-par value stock are issued for $18 cash per share. |
(2) A building costing $400,000 is acquired. A cash payment of $50,000 is made, and a long- |
term mortgage is assumed for the balance of the purchase price.
(3) Equipment costing $4,000 and merchandise inventory costing $6,000 are acquired on account.
(4) A 3-year fire insurance policy is taken out and the $600 premium is paid in advance.
(5) A 90-day, 6-percent note is issued to the bank for an $8,000 loan.
(6) Payments of $7,000 are made to the suppliers in (3).

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Cash Merchandise Inventory Prepaid Insurance Building Equipment Accounts Payable *Note Payable Mortgage Payable Common Stock-Par Value Capital Contributed in Excess of Par Value