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Problem 2-5A (Algo) Analyze the impact of transactions on the accounting equation and record transactions (LO2-2, 2-4)
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Karen owns a lawn maintenance company, and Janine owns a machine repair shop. For the month of July, the following transactions occurred.


July 3 Karen provides lawn services to Janine's repair shop on account, $450.
July 6 One of Karen's mowers malfunctions. Janine provides repair services to Karen on account, $400.
July 9 Janine pays $450 to Karen for lawn services provided on July 3.
July 14 Janine borrows $550 from Karen by signing a note.
July 18 Karen purchases advertising in a local newspaper for the remainder of July and pays cash, $120.
July 20 Karen pays $400 to Janine for services provided on July 6.
July 27 Janine performs repair services for other customers for cash, $750.
July 30 Janine pays employee salaries for the month, $250.
July 31 Janine pays $550 to Karen for money borrowed on July 14.
Problem 2-5A (Algo) Part 2
Required:

2. Using the format shown below, enter the impact of each transaction on the accounting equation for each company. (Decreases to account classifications should be entered as a negative.)

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Entering the impact of each transaction on the accounting equation for each company is as follows:

Karen (Lawn Maintenance Company):

                                                     Assets = Liabilities + Equity

Date            Cash     Accounts     Notes =   Accounts  + Retained Earnings

                               Receivable  Receivable Payable  Revenue - Expenses

July 3                            $450                                            $450 (Service Rev.)

July 6                                                              $400                              -$400 (Repair Expense)

July 9         $450        -$450

July 14      -$550                           $550

July 18      -$120                                                                                    -$120 (Advertising Expense)

July 20    -$400                                           -$400

July 31      $550                         -$550

Janine (Machine Repair Shop):

                                       Assets = Liabilities + Equity

Date            Cash     Accounts  = Notes    Accounts  + Retained Earnings

                               Receivable  Payable   Payable     Revenue - Expenses

July 3                                                              $450                         -$450 (Lawn Expenses)

July 6                          $400                                              $400 (Service Revenue)

July 9       -$450                                           -$450

July 14       $550                          $550

July 20      $400      -$400

July 27      $750                                                                $750 (Service Revenue)

July 30    -$250                                                                             -$250 (Salaries Expense)

July 31     -$550                        -$550

Transaction Analysis:

Karen's Company:

July 3 Accounts Receivable $450 Service Revenue $450.

July 6 Repairs Services $400 Accounts Payable $400

July 9 Cash $450 Accounts Receivable $450

July 14 Note Receivable $550 Cash $550

July 18 Advertising Expenses $120 Cash $120

July 20 Accounts Payable $400 Cash $400

Janine's Company:

July 3 Lawn Expenses $450 Accounts Payable $450

July 6 Accounts Receivable $400 Service Revenue $400

July 9 Accounts Payable $450 Cash $450

July 14 Cash $550 Note Payable $550

July 20 Cash $400 Accounts Receivable $400

July 27 Cash $750 Service Revenue $750

July 30 Salaries Expense $250 Cash $250

July 31 Note Payable $550 Cash $550

Thus, the accounting equation states that Assets = Liabilities + Equity.

Learn more about the accounting equation at https://brainly.com/question/24401217

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