Bookkeeping Made Simple 43

Question 1

1. Suppose the company purchases a machine costing 35k , with a down payment of 5k and signs a note for 30k. What is the entry?

Answer 1

Machinery…35k
Cash………5k
Notes Pay……30k

Question 2

2. When PART of this note is paid, the entry is:

Answer 2

Notes Paya….5,000
Interest Exp….….75
Cash……….…5,075