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A company buys equipment for $500,000 and signs a promissory note for the full amount. How does this transaction affect the accounting equation? Assets: Property
A company buys equipment for $500,000 and signs a promissory note for the full amount. How does this transaction affect the accounting equation?
- Assets: Property and equipment, V Cash; Liabilities: no change; Shareholders' Equity: no change.
- Assets: Property and equipment: Liabilities: 1 Notes payable; Shareholders' Equity; no change.
- Assets: Property and equipment; Liabilities: no change; Shareholders' Equity: v Retained earnings.
- Assets: Property and equipment; Liabilities: no change; Shareholders' Equity: V Contributed capital.
A company buys equipment for $500,000 and signs a promissory note for the full amount. How does this transaction affect the accounting equation?
- Assets: Property and equipment, V Cash; Liabilities: no change; Shareholders' Equity: no change.
- Assets: Property and equipment: Liabilities: 1 Notes payable; Shareholders' Equity; no change.
- Assets: Property and equipment; Liabilities: no change; Shareholders' Equity: v Retained earnings.
- Assets: Property and equipment; Liabilities: no change; Shareholders' Equity: V Contributed capital.
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