Clarence Graff practiced law with a large firm, a partnership, for five years after gradu-ating from law school. Recently he resigned his position to open his own law office, which he oper-ates as a professional corporation. The name of the new entity is Clarence Graff, Attorney,Professional Corporation (P.C.). Graff experienced the following events during the organizingphase of his new business and its first month of operations. Some of the events were personal anddid not affect his law practice. Others were business transactions and should be accounted for bythe business.Feb. 4 Graff received \(\$ 80,000\) cash from his former partners in the law firm from which he re-signed.5 Graff deposited \(\$ 60,000\) cash in a new business bank account entitled Clarence Graff,Attorney, P.C. The business issued common stock to Graff.6 Graff paid \(\$ 300\) cash for letterhead stationery for his new law office.7 Graff purchased office furniture for his law office. He agreed to pay the account payable,\(\$ 7,000\), within six months.10 Graff sold 500 shares of IBM stock, which he and his wife had owned for several years,receiving \(\$ 75,000\) cash from his stockbroker.11 Graff deposited the \(\$ 75,000\) cash from sale of the IBM stock in his personal bank ac-count.12 A representative of a large company telephoned Graff and told him of the company's in-tention to transfer its legal business to the new entity of Clarence Graff, Attorney, P.C.18 Graff finished court hearings on behalf of a client and submitted his bill for legal ser-vices, \(\$ 4,000\). Graff expected to collect from this client within two weeks.25 Graff paid office rent, \(\$ 1,000\).28 The business declared and paid a cash dividend of \(\$ 2,000\).Required1. Classify each of the preceding events as one of the following:a. A business transaction to be accounted for by the business of Clarence Graff, Attorney,P.C.b. A business-related event but not a transaction to be accounted for by the business ofClarence Graff, Attorney, P.C.c. A personal transaction not to be accounted for by the business of Clarence Graff, Attor-ney, P.C.2. Analyze the effects of the above events on the accounting equation of the business of ClarenceGraff, Attorney, P.C. Use a format similar to that in Exhibit 1-6.