Transaction Analysis
John Hasty opened his bakery on March 1, 1999, as a sole proprietor. The following transactions took place at the beginning of March:
1. Deposited $10,000 into a checking account in the name of the Hasty Bakery.
2. Rented a small kitchen and paid the first month’s rent of $500.
3. Purchased kitchen equipment for $3,000 cash.
4. Purchased baking ingredients for $6,000 on account.
5. Obtained a $2,000, 9%, one year loan.
6. Obtained a one year insurance policy on the kitchen equipment. Paid the entire premium of $500.
Required
a. Analyze the above transactions for March, using the basic accounting equation.
b. Record necessary adjustments: interest expense, insurance expense, and depreciation expense. (Assume a 60 month life and zero residual value.)
c. What additional information is needed to fully analyze Hasty Bakery results for March?