Reference no: EM132636223

Griffin Service Company, Inc., was organized by Bennett Griffin and five other investors. The following activities occurred during the year:

a. Received $70,000 cash from the six investors; each investor was issued 8,400 shares of common stock with a par value of $0.10 per share.

b. Purchased equipment for use in the business at a cost of $18,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months).

c. Signed an agreement with a cleaning service to pay $120 per week for cleaning the corporate offices next year.

d. Received an additional contribution from investors who provided $3,000 in cash and land valued at $15,000 in exchange for 1,000 shares of stock in the company.

e. Lent $2,500 to one of the investors, who signed a note due in six months.

f. Bennett Griffin borrowed $7,000 for personal use from a local bank, signing a one- year note.

Question 1: For each of the preceding transactions, record the effects of the transaction in the appropriate T- accounts (Cash, Notes Receivable, Equipment, Land, Notes Payable, Common Stock and Additional Paid-in Capital). Using the balances in the T-accounts, fill in the amounts for the accounting equation. Does the increase in assets match the increase in liabilities + shareholder's equity?