Show the Effect That Each of the Following Independent Transactions

question 105

Essay

Show the effect that each of the following independent transactions has on the elements of the accounting equation.Specify the type of asset, liability or owners' equity account that would be affected. $\begin{array}{lll}\text { Transaction } &\text { Assets }&=\text { Liabilities }&+\text { Equity }\\\hline\text { example: Borrows } & + \text { Cash } & + \text { Bank loan } \\\$ 50,000 \text { from bank } & +50,000 & +50,000\end{array}$ A) Employees work and earn $12,500, to be paid next week
B) Shareholder buys shares for 75,000
C) Pays $3,000 for current month's rent
D) Buys land for $15,000 cash and $85,000 loan
E) Sells $80,000 worth of goods on credit

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Definitions:

Monitoring

The process of supervising activities or individuals to ensure compliance, performance, or progress towards objectives.

Homeowner Bailouts

Financial assistance programs designed to help homeowners facing foreclosure, often as a result of economic crises, by providing refinancing, loan modifications, or other aids to prevent loss of their homes.

Moral Hazard

A situation where one party engages in risky behavior knowing that they are protected against the consequences, often because another party bears the cost.

Irresponsible Borrowings

Financial behavior that involves taking on debt in ways that are unsustainable or without a plan to manage repayment, leading to potential financial harm.