Transaction analysis: King Toot's, Ltd. provides music lessons to customers. The accountant for King Toot's...
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Transaction analysis: King Toot's, Ltd. provides music lessons to customers. The accountant for King Toot's observed the following transactions which occurred during January 2021. For each transaction, describe the effect of the transaction on the accounting equation. For example, in transaction a): 1) assets increase $10,000 and 2) SHE increases $10,000. a. 1/1/21: Issued 1,000 shares of common stock for $10 per share. Assets increase $10,000; SHE increases $10,000 (1,000 shares * $10 per share). a. 1/5/21: Purchased computer equipment for $2,000 on account. b. 1/9/21: Provided $900 worth of music lessons to customers on account. C. 1/19/21: Paid $400 in cash to creditors on accounts payable. d. 1/25/21: Received $250 in cash from customers as payment on their accounts receivable. e. 1/31/21: Paid $800 in cash for employee wages for January 2021
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