During the month, a company enters into the following transactions:

• Borrows $5,250 of cash from the bank by signing a formal agreement to repay the loan in 2 years.
• Buys $5,500 of new equipment on account.
• Pays off $3,500 of accounts payable.
• Pays off $1,750 of notes payable.

Required:

1. Show the effect of these transactions on the basic accounting equation.

2. Prepare the journal entries that would be used to record the transactions.

Required A Required B Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.) Transaction Analysis Liabilities Assets Stockholders' Equity Required A Required B Prepare the journal entries that would be used to record the transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 Record the entry for cash of $5,250 borrowed from the bank by signing a formal agreement to repay the loan in 2 years. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal