Effect of debt transactions on financial statements
Required
Show the effect of each of the following independent accounting events on the financial statements using a horizontal statements model like the following one. Use + for increase, for decrease, and NA for not affected. The first event is recorded as an example.
|
Event |
Assets |
= |
Liab. |
+ |
Equity |
Rev. |
Exp. |
= |
Net Inc. |
Cash Flow |
||
|
a |
+ |
+ |
NA |
NA |
NA |
NA |
+ |
FA |
||||
a. Issued a bond at face value.
b. Made an interest payment on a bond that had been issued at face value.
c. Borrowed funds using a line of credit.
d. Made an interest payment for funds that had been borrowed against a line of credit.
e. Made a cash payment on a note payable for both interest and principal.