Final answer:
When Qingji Corp. recorded an advance payment of $50,000 on Aug. 1, the accounting equation was impacted by increasing the assets and liabilities of the company.
Step-by-step explanation:
When the advance payment of $50,000 was recorded on Aug. 1, the accounting equation would be impacted by increasing the assets and increasing the liabilities of Qingji Corp. The increase in assets would be recorded as a debit to the cash account as the company received cash. This would increase the left side of the accounting equation, which represents the company's assets. The increase in liabilities would be recorded as a credit to the unearned revenue account, as the company received an advance payment for goods it has not yet delivered. This would increase the right side of the accounting equation, which represents the company's liabilities. This transaction would be recorded as follows: Cash (asset) +$50,000 (debit). Unearned Revenue (liability) +$50,000 (credit).
When Qingji Corp. received an advance payment of $50,000 on Aug. 1 for an order of five oil separators, the accounting equation was impacted as follows: cash (an asset) increased by $50,000, and unearned revenue (a liability) also increased by $50,000. The entry to record this transaction would be a debit to the cash account and a credit to the unearned revenue account. When the company delivers the oil separators, the unearned revenue would then be recognized as earned revenue, impacting the equity section of the accounting equation. This advance payment represents a commitment from the customer and a liability for the company until the delivery of goods or the completion of the service.