The following transactions occurred during March, the first month of operations for Quality Galleries Limited:
* Share Capital was issued in exchange for $360,000 cash.
* Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance.
* Made a $35,000 cash payment on the note payable from the purchase of equipment.
* Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale.

-Refer to the above data. What is the balance in the Note Payable account at the end of March?

Question

The following transactions occurred during March, the first month of operations for Quality Galleries Limited:
* Share Capital was issued in exchange for $360,000 cash.
* Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance.
* Made a $35,000 cash payment on the note payable from the purchase of equipment.
* Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale.

-Refer to the above data. What is the balance in the Note Payable account at the end of March?

Quizplus · Accepted Answer

The balance in the Note Payable account at the end of March can be calculated as follows:
Note Payable balance = Equipment cost - Cash down payment - Cash payment made
Note Payable balance = $180,000 - $60,000 - $35,000
Note Payable balance = $85,000

The Following Transactions Occurred During March, the First Month of Operations