Following are the transactions of Equine Company:
a.Sold equipment for $1,000. The original cost was $15,700; the book value is $1,700.
b.Purchased equipment costing $110,000 by paying cash of $20,000 and signing a $90,000 long term note at 12% interest.
c.Received $5,000 of the principal and $450 in interest on a long term note receivable.
d.Received $2,500 in cash dividends on stock held as a trading security. (Assume that the cost method is used.)
e.Purchased treasury stock for $3,000.
Complete the following:
1. Prepare journal entries for each of the transactions. (Omit explanations.)
2.For each transaction, indicate the amount of cash inflow or outflow. Then, note how each transaction would be classified on a statement of cash flows.