Soar Inc.enters into the Following Transactions

question 163

Essay

Soar Inc.enters into the following transactions:
-Stockholders contribute $10,000 cash to a company in exchange for common stock.
-The company purchases $5,000 to buy new equipment by paying cash.
-The company pays $3,000 to suppliers on account.
Required:
Part a.Show the effect of these transactions on the basic accounting equation.
Part b.Prepare the journal entries that would be used to record the transactions.

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Definitions:

Spot Rate

The current market price at which a particular asset, such as currency, commodity, or security, can be bought or sold for immediate settlement.

Exchange Rates

The price of one country's currency in terms of another currency, influencing international trade and investment.

Pesos

The currency used in various Latin American countries and the Philippines, symbolized by "$" or "₱" depending on the country.

Bolivars

The currency of Venezuela, used in financial transactions within the country.