Simpson Auto Body Repair purchased $20,000 of machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments.?
(a) How will the purchase affect the accounting equation?
(b) How will the payment of the first monthly installment affect the accounting equation (ignore interest)?

Question

Simpson Auto Body Repair purchased $20,000 of machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments.?
(a) How will the purchase affect the accounting equation?
(b) How will the payment of the first monthly installment affect the accounting equation  (ignore interest)?

Quizplus · Accepted Answer

The Answer of Simpson Auto Body Repair purchased $20,000 of machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments.?
(a) How will the purchase affect the accounting equation?
(b) How will the payment of the first monthly installment affect the accounting equation  (ignore interest)?

Simpson Auto Body Repair Purchased $20,000 of Machinery