D. C. Dawg Transactions
D. C. Dawg opened its doors as a business in March. The following are a list of cash transactions that occurred during that month. Each of these transactions has an effect on the accounting equation. The accounting equation is Assets equal Liabilities plus Owner's Equity. The following is a breakdown of the effect of each transaction on the accounting transaction.
1. The owner, D. C. Dog invests $6,000 cash to start the business.
Assets = Liabilities + Owner's Equity
Cash Capital
+ $6,000 + $6,000
2. March 1, $2,000 is borrowed form the bank. It is a one year with 12% interest, the note is payable by February 28 of the following year. This repayment includes principal and interest.
Assets = Liabilities + Owner's Equity
Cash Notes Payable D. C. Dawg, Capital
+$6,000 +$6,000......
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