Ian McMahon opens a solar-powered moped rental business near a college campus. He is the sole owner of the proprietorship, named Campus Motor Bikes. Transactions for the first month of operations, July 2013, are shown below.

1. Analyze the following transactions in terms of their effect on the accounting equation.

2. Prepare the income statement and balance sheet of the business after recording the transactions.

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July transactions a. Ian invests $20,500 of personal funds to start the business. b. C. He purchases on account office supplies costing $350. Ian pays cash of $30,000 to acquire a lot next to the campus for a future business office. d. Ian rents scooters to clients and receives cash of $1,900. e. Ian pays $100 on the account payable in transaction (b). He pays $2,000 of personal funds for a vacation. f. g. h. He pays cash expenses for office rent, $400, and utilities, $100. Ian withdraws $1,200 cash for personal use.