The purchase of equipment costing $8,500 for $1,500 down and the balance on account will increase both sides of the balance sheet equation by $7,000.

Question

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The purchase of equipment for $8,500 with $1,500 down and the balance on account will increase the asset side of the balance sheet (equipment) by $7,000 and the liability side of the balance sheet (accounts payable or notes payable) by $7,000. Therefore, both sides of the equation will increase by $7,000.

The Purchase of Equipment Costing $8,500 for $1,500 Down and the Balance