QUESTION 1

Kofi Owusu, a sole proprietor started business on September 1, 2022. The following are the transactions for the month of August 2022:

Aug 2. Owner of the enterprise started business with GHC 5,000 cash

Aug 3. Bought office equipment for GHC 2,000 on credit from Enchi Ltd on credit

Aug 7. Bought goods on credit for GHC 500 from Kojo Ayitey Ent.

Aug 13. Added additional capital of Ghc 2,000 by paying cheque

Aug 16. Paid Ghc 1,000 cash of amount owed to Enchi Ltd

Aug 17. Withdrew Ghc 500 for personal use Aug 20. Took a credit facility of GHC 5,000 from Eno Mary Venture to expand his business

Aug 22. Paid the amount owed to Kojo Ayitey Ent in full by paying cheque

Aug 24. Paid the remaining amount owed Enchi Ltd by paying cash

Aug 30. An amount due to the Accountant who helped in setting up the business account is Ghc 1,000. Kofi Owusu promised to settle this amount the following month.

Required:

i. Show the effects of these transactions on the Accounting Equation

ii. Indicate the accounts to be credited and the accounts to be debited.