Record the Following Transactions in the Basic Accounting Equation

question 11

Essay

Record the following transactions in the basic accounting equation:
a. Luke invests $25,000 cash to begin a financial planning service.
b. The company buys office furniture for cash, $1,200.
c. The company buys additional office furniture on account, $600.
d. The company makes a payment on the office furniture, $400.
Luke's Financial Planning
ASSETS = LIABILITIES + OWNER'S EQUITY
Cash + Office Furniture = Accounts Payable + Luke's, Capital

a.
b.
c.
d.
Totals

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Definitions:

Variable Interest Entity

A legal entity in which an investor holds a controlling interest not based on majority voting rights.

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability to its shareholders, and having the ability to raise capital by selling shares.

Adjusted Book Value

The net worth of a company, calculated by adjusting the assets' and liabilities' book value on the balance sheet to reflect their true market value.

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the company’s assets and earnings.