Return to questionItem 5Item 5 1.66 points For each of the following transactions of Spotlighter, Inc., for the month of January, indicate the accounts, amounts, and direction of the effects on the accounting equation. A sample is provided. (Enter any decreases to account balances with a minus sign.) a.(Sample) Borrowed $5,740 from a local bank on a note due in six months. b. Received $6,430 cash from investors and issued common stock to them. c. Purchased $2,800 in equipment, paying $1,100 cash and promising the rest on a note due in one year. d. Paid $1,200 cash for supplies. e. Bought and received $1,600 of supplies on account.

The accounting equation is shown below.

Explanation:

Particular       Assets    =            Liabilities          +           Stockholder equity

a. Cash   $5,740                    Note payable  $5,740

b. Cash    $6,430                                                                Common stock $6,430

c. Cash - $1,100

Equipment $2,800               Note payable  $1,700

d. Supplies $1,200

Cash  - $1,200

e. Supplies $1,600            Account payable $1,600

Total        $15,470                      $9,040                                   $6,430

The positive or no signs reflects the increase in accounts while the negative signs reflects the decrease in accounts

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