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  3. ssume downer.com was organized on may 1, to compet

ssume Downer.com was organized on May 1, to compete with Despair, Inc.a company that sells...

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Accounting

ssume Downer.com was organized on May 1, to compete with Despair, Inc.a company that sells de-motivational posters and office products. The following events occurred during the first month of Downer.coms operations.

  1. Received $62,000 cash from the investors who organized Downer.com Corporation.
  2. Borrowed $21,000 cash and signed a note due in two years.
  3. Ordered computer equipment costing $16,500.
  4. Purchased $9,500 in equipment, paying $2,200 in cash and signing a six-month note for the balance.
  5. Received the equipment ordered in (c), paid for half of it, and put the rest on account.

Required: 1. For each of the events (a) through (e), perform transaction analysis and indicate the amount of effect on the accounting equation. (Enter any decreases to account balances with a minus sign.)

2. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

3. Prepare a classified balance sheet at May 31. Include retained earnings with a balance of zero.

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