ABC Company bought some land with a price of $50,000 by making a $10,000 down payment and owing the rest. The journal entry would include: Group of answer choices $40,000 debit to land $50,000 debit to land $50,000 credit to land $10,000 debit to land
ABC Company bought some land with a price of $50,000 by making a $10,000 down payment and owing the rest. The journal entry would include: Group of answer choices $40,000 debit to land $50,000 debit to land $50,000 credit to land $10,000 debit to land
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ABC Company bought some land with a price of $50,000 by making a $10,000 down payment and owing the rest. The journal entry would include:
Group of answer choices
$40,000 debit to land
$50,000 debit to land
$50,000 credit to land
$10,000 debit to land
Expert Solution
Step 1
Introduction:
Cash land purchases have an impact on many areas of your balance sheet's asset column. Cash is a present asset, but land is a long-term asset. The complete purchase price is deducted from the land account, and the cash account is also reduced by the same amount.
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