The following events occurred for Favata Company:
a. Received $20,000 cash by organizers and issued stock to them.
b. Borrowed $6,000 cash from a bank.
c. Purchased land for $12,000; paid $1,000 in cash and signed a note for the balance.
d. Loaned $300 to an employee who signed a note.
e. Purchased $8,000 of equipment, paying $1,000 in cash and signing a note for the rest.
Required:
For each of the events a through e, perform transaction analysis and indicate the account, amount, and direction of the effect (_ for increase and _ for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. Use the following headings:
Event Assets _ Liabilities _ Stockholders' Equity