For each of the following independent situations, identify the assumption or concept or constraint that has been violated, if any. State what the company should have done.
-ABC Company bought equipment from a company that was bankrupt. ABC paid $50,000 for the equipment, even though it had a market value of $65,000. ABC recorded the purchase with a debit of $65,000 to Equipment, a credit of $50,000 to Cash, and a credit of $15,000 to the owner's capital account.

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The Answer of For each of the following independent situations, identify the assumption or concept or constraint that has been violated, if any. State what the company should have done.
-ABC Company bought equipment from a company that was bankrupt. ABC paid $50,000 for the equipment, even though it had a market value of $65,000. ABC recorded the purchase with a debit of $65,000 to Equipment, a credit of $50,000 to Cash, and a credit of $15,000 to the owner's capital account.

For Each of the Following Independent Situations, Identify the Assumption