On January 2, 2015, Summers Company bought a machine for use in operations. The machine has an estimated useful life of seventeen years and an estimated residual value of $3,900. The company provided the following expenditures:

a.

Invoice price of the machine, $94,000.

b.

Freight paid by the vendor per sales agreement, $2,000.

c.

Installation costs, $3,900 paid in cash.

d.

Payment was made as follows:

On January 2:

The installation costs were paid in cash.

Summers Company common stock, par $1; 5,000 shares (market value, $1.50 per share).

Note payable, $49,000; 19.0 percent due April 16, 2015 (principal plus interest).

Balance of invoice price to be paid in cash. The invoice allows for a 4 percent discount for cash paid by January 12.

On January 15:

Summers Company paid the balance due.

Required:

2.

Record the purchase on January 2 and the subsequent payment on January 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3.	Indicate the accounts, amounts, and effects (+ for increase and for decrease) of the purchase and subsequent cash payment on the accounting equation. Use the following structure: