Dual effects of transactions on balance sheet equation and journal entries. A firm engages in the following six transactions.

(1) The firm issues 5.000 shares of $10 par value common stock for $60,000 cash.

(2) It purchases merchandise costing $29,200 on account.

(3) The firm acquires store equipment costing $32,700. It issues a check for $5,000. with the balance payable over three years under an installment contract.

(4) The firm issues a check for $4,500 covering two months' rent in advance. (5) Refer to transaction (3). The firm issues 2,000 shares of its $10-par value common stock with a market value of $27,700 in full settlement of the installment contract.

(6) The firm pays the merchandise supplier in transaction (2) the amount due.

a. Indicate the effects of these six transactions on the balance sheet equation using this format:

Transaction Number Assets Liabilities Shareholders' Equity

(1) $60,000 +$60,000 Subtotal $60,000 SO so

+

$60,000

b. Give the journal entry for each of the six transactions.