C2IT Corporation
the C2IT Corporation Was Organized on July 1 $\quad$

C2IT Corporation
The C2IT Corporation was organized on July 1, after the two principal owners each contributed $100,000 and received shares in exchange. The company's year-end is December 31. The following events occurred during the first year of operations:
July 1 $\quad$ The company acquired a building by paying $\$ 100,000$ cash and borrowing $\$ 375,000$ from the Big Bank. Depreciation expense per year is $\$ 12,500$ . The note payable will be due in full in ten years. Interest is payable annually. The interest rate on the note is $10 \%$

Sept. 1 $\quad$ The company paid cash in the amount of $12,000 for a one-year property insurance policy.

Oct. 1 $\quad$ The company purchased computers for $10,000 cash. The computers will be depreciated using the straight-line method and will have $2,000 depreciation expense per year.

Nov. 1 $\quad$ The company received $240,000 in cash for services to be provided eventy during the next six months
-Refer to C2IT Corporation.Answer the following questions:
A) Determine the effect on the accounting equation of each transaction.

B) Determine the effect on the accounting equation of the necessary adjustments at December 31 for each of the following:
1. depreciation on the building
2. interest on the promissary note
3. recognition of the expired portion of the insurance
4. depreciation on the computers
5. cash received in advance of services provided
C) Prepare an income statement for the six months ended December 31,2013 . C2IT has a tax rate of $30 \%$