Associating transactions with their effects on the accounting equation:
Life Support, a not-for-profit nursing home, had the following transactions in 2013. For each transaction, state whether an asset increased or decreased, a liability increased or decreased, or equity (revenues or expenses) increased or decreased. (Each transaction has two answers.)
1. Borrowed $100,000 in cash from a bank.
2. Bought equipment on credit.
3. Sent bills to Medicaid for care of residents.
4. Paid rent on January 1 for the 3-month period January-March.
5. Recorded depreciation on equipment it owned.
6. Paid salaries to its employees.
7. Made a year-end accrual for interest owed the bank on money it had borrowed.