Impact on the Balance Sheet Equation. For each transaction, consider the impact on the balance sheet equation (after closing entries are recorded). Thus, if the transactions affect the income statement, determine the impact on the balance sheet after closing entries are recorded. Enter the dollar amount in the correct column using the giant t-account for assets, liabilities, and equity (see example 0). Transaction 0 Borrowed $400 Assets + +400 Liabilities Equity + + +400 1 Issued common stock for $500 cash. + + 2 Bought building with 10-year life and no salvage value, for $20,000 cash. + 3 Bought land by issuing debt of $800. + 4 5 6 Signed a one-year lease, as the landlord, with a tenant who agrees to pay rent of $1,000 per month. Received, on November 22, payment of $3,000 for December through February rent for the lease described in (4). Recorded any necessary adjusting + . + + + + + + + + + + entries for the lease and payment + + described in (4) and (5) when the books were closed on December 31. 7 Recognized one year of depreciation + + expense on the building in (2). 8 Received, during March, payment of + . + $1,000 in fulfillment of March rent for the lease in (4). 9 Prepaid $600 for a two-year insurance policy. 10 Declared, but did not yet pay, a $200 dividend to common shareholders. + + + + 1 . . + + + + + 3