Practice entry 17 10 20 Transaction 23 b. C 20 NE d. A piece of kitchen equipment is purchased for $1,500. $2,000 in cash is borrowed from a local bank. $10,000 is invested in the business by the owner. A note payable is created to repay an accounts payable (AP). An accounts payable amount owed to a vendor is paid in cash. A dividend is declared but not yet paid. Cash is withdrawn by the owner of the business. Long-term debt owed to a sole proprietor is converted to owners equity. Preferred stock in a company is converted to common stock Transaction Impact Increase an asset and increase an owner's equity account Decrease an asset and decrease an owner's equity account Increase an asset and increase a liability Decrease a liability and decrease an asset Increase one asset and decrease another asset Increase an owner's equity account and decrease another owner's equity account Increase a liability and decrease an owner's equity account Increase one liability and decrease another liability Decrease a liability and increase an owner's equity account