Equipment is acquired by issuing a note payable for $58,000 and a making a down payment of $26,000.The statement of cash flows will report a:

Question

Quizplus · Accepted Answer

The purchase of equipment is considered an investing activity and the down payment of $26,000 would be an outflow in this section of the statement of cash flows. The note payable of $58,000 would be included in the financing activities section as it represents a liability being assumed by the company. There would be no impact on the operating activities section. Therefore, the correct answer is D.

Equipment Is Acquired by Issuing a Note Payable for $58,000