LO.2 Compare the cash and accrual methods of accounting for the following events:

a. Purchased new equipment, paying $50,000 cash and giving a note payable for

$30,000 due next year.

b. Paid $3,600 for a three-year service contract on the new equipment.

c. Collected $1,800 for services to be provided over the current and following years.

d. Received a $3,000 note from a customer for services provided in the current year.

The market value of the note was only $2,400.