Candace Law Firm (1)The following are transactions of the new business, Candace Law Firm, during its first month in operation. 1. Issued common stock for $7,000.2. Borrowed $3,000 from bank to be paid back in two years. 3. Bought equipment to be used in the business for $3,600 cash. 4. Purchased an insurance policy for $480. 5. Sold services for $5,000. One-half of this was paid in cash and one-half on account.6. Paid salaries of $2,000.7. Bought land as an investment for $1,000.8. Sold one-half of land for $800. (See the note below)9. Collected $500 of what our clients owe us.10. Received an invoice from the utility company showing a balance due of $600. This invoice will bepaid at the first of the next month. (See the note below)Note regarding #8:To record the sale of land, first compare the sales price with the amount that is recorded on the books for that segment of land. Since only one-half of the land is being sold, only one-half of the cost of the land should be removed from the balance sheet. The difference between the sales price of the land and the amount that was paid for it is shown as “gain on sale of land” and goes on the income statement below revenues and expenses. So, #8 has three parts to record:1. The increase in cash of $8002. The decrease in the land account of $5003. The gain on the sale of the land of $300 (reported below “expenses” on the income statement) Note regarding #10:This invoice is a bill for utilities used during the company’s first month of business, but it is not due and won’t be paid until the beginning of the next month. Accrual accounting always attempts to match up revenues and the expenses that were incurred to earn those revenues. The amount owed to the utility company needs to be shown as an expense (Utilities Expense) of the period and as an amount that the company owes (Utilities Payable) at the end of the period.How to approach this problem:First, go through all the transactions and record the impact of each transaction on the financial statements. Once you have done this, determine the company’s net income for the period. Take the net income figure forward to determine the ending retained earnings. Then, take the ending retained earnings figure to the stockholders’ equity section of the balance sheet. If your total assets don’t equal liabilities plus stockholders’ equity, you need to look back for an