Purchase Solution

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The company borrowed \$125,000 in cash from Far West Bank.

a. List the accounts impacted by the transaction.
b. For each account, indicate whether the transaction increased or decreased the account.
c. For each account, indicate how much the transaction increased or decreased the account.
d. Compute the impact of the transaction on total assets, total liabilities, and total owner's equity.

Practice 3-2 Impact of a transaction:
The company used \$45,000 in cash to purchase land on the west side of Hatu Lake.

3-11 Make Journal entries to record the transaction in Practice 3-1?

3-12 Make Journal entries to record the transactions in Practice 3-2?.

3-16 Refer to the journal entries made in 3-11 and 3-12. Construct a T-account representing each account impacted by those five transactions. Post all of the journal entries to these T-accounts. Compute the ending balance in each account. Assume that the beginning balance in each T-account is zero.

3-19 Prepare a Trial Balance

Refer to the T-accounts constructed in Practice 3-16. Using the ending balances in those T-accounts, construct a trial balance. Note: The only account that is common to these two sets of T-accounts is the cash account; add the two cash account balances together to get the total balance.

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Practice 3-1 Impact of a Transaction:
The company borrowed \$125,000 in cash from Far West Bank.

a. List the accounts impacted by the transaction.

As the company cash from Far West Bank, it will impact the accounts as follows: -
Cash and Notes Payable accounts

b. For each account, indicate whether the transaction increased or decreased the account.

As the money is borrowed, the accounts of cash and notes payable will be increased.
Cash - Increased
Notes Payable - Increased

c. For each ...

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