$1.$

Indicate the effects $($accounts$,$ amounts, and $+$ or $-)$ of each transaction $($on January $1,2,3,$ and $5$ and July $1)$ on the accounting equation. Use the following schedule:

Date Asset $=$ Liabilities $+$ Stockholders equity

$2.$ What impact does the interest paid on the $10$ percent note have on the cost of the machine? Under what circumstances can interest expense be included in acquisition cost?