EZ Curb Company completed the following transactions. The annual accounting period ends December 31.

Jan. 8 Purchased merchandise on account at a cost of $14,000. (Assume a perpetual inventory system.)

Jan. 17 Paid for the January 8 purchase.

Apr. 1 Received $40,000 from National Bank after signing a 12-month, 6 percent, promissory note.

June 3 Purchased merchandise on account at a cost of $18,000.

July 5 Paid for the June 3 purchase.

July 31 Rented out a small office in a building owned by EZ Curb Company and collected six months’ rent in advance, amounting to $6,000. (Use an account
called Deferred Revenue.)

Dec. 20 Collected $100 cash on account from a customer.

Dec. 31 Determined that wages of $6,500 were earned but not yet paid on December 31 (ignore payroll taxes).

Dec. 31 Adjusted the accounts at year-end, relating to interest.

Dec. 31 Adjusted the accounts at year-end, relating to rent.

Required:

1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects (+ for increase, − for decrease, and NE for no effect) on the accounting equation, using the following format:

2. For each transaction and related adjusting entry, state whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Company’s debt-to-assets ratio has always been less than 1.0.)

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Liabilities Stockholders' Equity Date Assets