Bostel wanted to expand the size of its warehouse in order to generate more profits.The company decided to purchase the building adjacent to its existing warehouse.The company pays for the building by borrowing from the bank.The purchase would be recorded as:

Question

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The purchase of the building would be recorded by debiting the Buildings account, as it represents an increase in the company's assets, and crediting the Notes Payable account, as the company borrowed money to finance the purchase. There is no need to debit the Cash account, as the company did not use its own cash to purchase the building.

Bostel Wanted to Expand the Size of Its Warehouse in Order