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E2-15 Analyzing and Recording Transactions, and Preparing and Evaluating a Balance Sheet [LO 2-2, LO 2-3, LO 2-4, LO 2-5]

Business Sim Corp. (BSC) issued 1,000 common shares to Kelly in exchange for $15,000. BSC borrowed $36,000 from the bank, promising to repay it in two years. BSC purchased computer equipment for $47,000, signing a six-month note for $6,000, and paying the balance with check number 101. BSC received $750 of supplies purchased on account. BSCs loan contains a clause (covenant) that requires BSC to maintain a ratio of current assets to current liabilities of at least 1.5.

BUSINESS SIM CORP. Balance Sheet At September 30 Assets Liabilities Accounts Payable Notes Payable (short-term) Cash > 30,000 X 750 Supplies 30,750 0 Equipment 53,000 0 Notes Payable (long-term) Common Stock Total Current Assets Total Liabilities and Stockholders' Equity Total Assets $ 83,750 0