QUESTION 44 On January 1, 2020, Smith Company signed a ten-year Note for the acquisition of equipment. Annual note payments of $22,000, based on an interest rate of 10% are to be made every December 31, beginning with December 2020. The present value of the note payments is $135,180. Required: Indicate the effect of the following on the company's accounting equation. Indicate each account title affected and the dollar change and whether it increased or decreased. To record the acquisition of equipment on January 1, 2020. O Increased the asset cash and liability note payable for $135,180. O Increased the asset equipment and liability note payable for $135,180. O Increased the asset cash and liability note payable for $220,000. O Increased the asset leased equipment and liability lease liability for $220,000.

QUESTION 44 On January 1, 2020, Smith Company signed a ten-year Note for the acquisition of equipment. Annual note payments of $22,000, based on an interest rate of 10% are to be made every December 31, beginning with December 2020. The present value of the note payments is $135,180. Required: Indicate the effect of the following on the company's accounting equation. Indicate each account title affected and the dollar change and whether it increased or decreased. To record the acquisition of equipment on January 1, 2020. O Increased the asset cash and liability note payable for $135,180. O Increased the asset equipment and liability note payable for $135,180. O Increased the asset cash and liability note payable for $220,000. O Increased the asset leased equipment and liability lease liability for $220,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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