Mulkeen Service Company, Inc., was incorporated by Conor Mulkeen and five other managers. The following activities occurred during the year:

1. Received $60,000 cash from the managers; each was issued 1,000 shares of common stock.
2. Purchased equipment for use in the business at a cost of $12,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).
3. Signed an agreement with a cleaning service to pay it $120 per week for cleaning the corporate offices, beginning next year.
4. Conor Mulkeen borrowed $10,000 for personal use from a local bank, signing a one-year note.

Required:

1. For each of the above transactions, record its effects in the appropriate T-accounts. Assume all beginning balances are zero.

Cash, Equipment, Note Payable, Common Stock

Beginning / Ending balance

2. Asset ?= Liability ?+ Stockholders equity ?

3. What will be your response to transaction (c)?

What will be your response to transaction (d)?