The owner invested $15,000 cash in the company in exchange for its common stock. The company purchased supplies for $500 cash. The owner invested $10,000 of equipment in the company in exchange for more common stock. The company purchased $200 of additional supplies on credit. The company purchased land for $9,000 cashEnter the impact of each transaction on individual items of the accounting equation.

Question

Ward

Business

19 September, 18:58

The owner invested $15,000 cash in the company in exchange for its common stock. The company purchased supplies for $500 cash. The owner invested $10,000 of equipment in the company in exchange for more common stock. The company purchased $200 of additional supplies on credit. The company purchased land for $9,000 cashEnter the impact of each transaction on individual items of the accounting equation.

+2

Answers (1)

Know the Answer?

Gideon Benton · Answer 1

Every entry in the accounting book has an impact either on the debit side or on the credit side of the account. What comes in is credited and what goes out is debited.

Explanation:

With the investment made by the company for common stock, cash will be debited and the stocks will be credited. With supplies being purchased, cash again is debited and the supplies are entered on the credit side of the account book.

With land purchased, land is credited and the cash is again debited because it goes out of the company. With additional supplies purchased, assets in the form of purchase of supplies are increased but the liabilities also increase by the same amount because of the credit.