Jania Corporation was organized on December 1 of the current year and had the following

account balances at December 31, listed in tabular form:

Assets = Liabilities +

Owners'

Equity

Cash + Land Building +

Office

Equipment =

Notes

Payable +

Accounts

Payable +

Capital

Stock

Balances $15,000 $90,000 $87,000 $42,700 $60,000 $74,700 $100,000

Early in January, the following transactions were carried out by Jania Corporation:

1. Sold capital stock to owners for $30,000.

2. Purchased land and a small office building for a total price of $100,000, of which

$40,000 was the value of the land and $60,000 as the value of the building. Paid $20,000

in cash and signed a note payable for the remaining $80,000.

3. Bought several computer systems on credit for $9,000 (30-day open account).

4. Obtained a loan from 1st Bank in the amount of $10,000. Signed a note payable.

5. Paid the $5,000 account payable due as of December 31.

Instructions

a. List the December 31 balances of assets, liabilities, and owners' equity in tabular form

shown.

b. Record the effects of each of the five transactions in the format illustrated in Chapter 2 of

the text. Show the totals for all columns after each transacti