Balance Sheet Classification Horn Publishing Corporation wishes to prepare a classified balance sheet. During the past two weeks, Horn was involved in the following transactions that have not been recorded:

1. Inventory costing $800 was sold on account for $1,000.

2. A total of $5,000 was borrowed from a local bank on a five-year note payable.

3. Cash of $4,500 was received from annual renewals of magazine subscriptions.

4. Employees earned wages of $600 and were paid immediately.

5. A patent costing $17,000 was purchased.

6. Payment of $1,800 was made for a three-year insurance policy.

You have been asked to analyze each transaction and:

a. Indicate which balance sheet element(s) will be changed and whether the reported balance(s) will increase or decrease when the transactions are recorded.

b. Indicate whether each of the elements affected is a current or noncurrent asset, current or noncurrent liability, owners’ equity item, or none of the above.