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The following transactions occurred during March,the first month of operations for Quality Galleries,Inc.:
* Capital stock 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.
-What is the balance in the Note Payable account at the end of March?
A)$120,000
B)$85,000
C)$35,000
D)$155,000

Question

Quizplus · Accepted Answer

The total amount of the equipment purchase was $180,000, which includes a $60,000 cash down payment and a note payable for the remaining balance of $120,000 ($180,000 - $60,000 = $120,000). The $35,000 cash payment made on the note payable would leave a remaining balance of $85,000 ($120,000 - $35,000 = $85,000) in the Note Payable account at the end of March.

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