Q$2.$

Glenn Grimes is the founder and president of Heartland Construction, a real estate development venture. The business transactions during

February while the company was being organized are listed as follows:

February $1$ Grimes and several others invested $$600,000$ cash in the business in exchange for $30,000$ shares of capital stock.

February $10$ The company purchased office facilities for $$292,500,$ of which $$97,500$ was applicable to the land and $$195,000$ to the building. A

cash payment of $$58,500$ was made and a note payable was issued for the balance of the purchase price.

February $16$ Computer equipment was purchased from PCWorld for $$12,900$ cash.

February $18$ Office furnishings were purchased from Hi$-$Way Furnishings at a cost of $$9,050.$ A $$905$ cash payment was made at the time of

purchase, and an agreement was made to pay the remaining balance in two equal installments due March $1$ and Aprill $1.$ Hi$-$Way

Furnishings did not require that Heartland sign a promissory note.

February $22$ Office supplies were purchased from Office World for $$345$ cash.

February $23$ Heartland discovered that it paid too much for a computer printer purchased on February $16.$ The unit should have cost only $$340,$ but

Heartland was charged $$385.$ PCWorld promised to refund the difference within seven days.

February $27$ Mailed Hi$-$Way Furnishings the first installment due on the account payable for office furnishings purchased on February $18.$

February $28$ Received $$45$ from PCWorld in full settlement of the account receivable created on February $23.$

Required:

a$.$ Prepare journal entries to record the above transactions. Select the appropriate account titles from the following chart of accounts:

Cash

Land

Accounts Receivable

Office Building

Office Supplies

Notes Payable

Office Furnishings

Accounts Payable

Computer Systems

Capital Stock

b$.$ Indicate the effects of each transaction on the company's assets, liabilities, and owners' equity for the month of February. The February

$1$ transaction is provided for you.