A hotel purchased a new vending machine for $14,000. Half of the cost was paid in cash and the other half was financed through a bank loan. To record this transaction which of the following statements is correct?
A) Assets and liabilities would each increase by a total of $14,000.
B) There would be an increase to an asset account and a decrease to a liability account.
C) Assets and liabilities would each increase by a total of $7,000.
D) The vending machine account would be increased by half of its cost as only half of the asset is owned.
E) None of the above are correct.
Correct Answer:
Verified
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