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

Borrows $6,750 of cash from the bank by signing a formal agreement to repay the loan in 2 years.

Buys $6,100 of new equipment on account.

Pays off $4,100 of accounts payable.

Pays off $2,050 of notes payable.

Required:

a) Show the effect of these transactions on the basic accounting equation.

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