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The fundamental accounting equation can be applied to your personal finances. For each of the following transactions, show how the accounting equation would be kept in balance. Example: Paid for semester’s tuition (decrease assets: cash account; decrease owners’ equity: expense account increases).
1. Took out a school loan for college.
2. Paid this month’s rent.
3. Sold your old computer for cash at what it cost to buy it.
4. Received week’s paycheck from part-time job.
5. Received interest on savings account.
6. Paid monthly payment on car loan (part of the payment is principal; the remainder is interest).
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