Parsons Fashion Designers was started on June |. The following transactions of the company occurred during June:

(a) E. Parsons started the business by investing $28,000 cash.

(b) Land and an office building were acquired at a cost of $5,000 and $18,000, respectively. The company paid $6,000 down and signed a note for the remaining balance of

$17,000. The note is due in two years.

(c) Design equipment was purchased. The cash price of $2,600 was paid by writing a check to the supplier.

(d) Office supplies totaling $250 were purchased on credit. The amount is due in 30 days.

(e) A one-year fire insurance policy was purchased for $800.

(f) Fashion design commissions (fees) of $1,200 were collected for June.

(g) An assistant’s salary of $600 was paid for June.

(h) E. Parsons withdrew $500 from the company for personal use.

(i) Utility bills totaling $150 for June were received and will be paid in early July.

Required: (1) Using the accounting equation format shown in the chapter, record the preceding transactions.
(2) Prove the equality of the accounting equation at the end of June.
(3) List the source documents that you would normally use in recording each of the transactions. lo7