Mexland Company,acquired land costing $25,000.Mexland Company paid $10,000 in cash and issued a short-term note for the balance.The effect of this transaction on Mexland Company,would be to

Question

Quizplus · Accepted Answer

The transaction involves the acquisition of land costing $25,000, where $10,000 was paid in cash and a short-term note was issued for the balance. This means that the cost of the land is $25,000, which will increase the Land account by $25,000. The payment is partially made in cash, which will decrease the Cash account by $10,000. The remaining balance of $15,000 is paid through a note, which will increase the Notes Payable account by $15,000. Therefore, the correct choice is E, which reflects all three accounts affected by the transaction.

Mexland Company,acquired Land Costing $25,000