Required information P8-1 (Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial Statement Effects of Its Purchase LO8-1, 8-2 [The following information applies to the questions displayed below.] On January 2, Summers Company received a machine that the company had ordered with an invoice price of $100,000. Freight costs of $880 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine: a. Issued 2,200 shares of Summers Company common stock, par value $1 (market value, $3.50 per share). b. Signed a note payable for $64,000 with an 11.4 percent interest rate (principal plus interest are due April 1 of the current year). c. The balance of the invoice price was on account with the vendor, to be paid in cash by January 12. On January 3, Summers Company paid $2,100 cash for installation costs to prepare the machine for use. On January 12, Summers Company paid the balance due on its accounts payable to the vendor. 1 Part 3 dicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to
Required information P8-1 (Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial Statement Effects of Its Purchase LO8-1, 8-2 [The following information applies to the questions displayed below.] On January 2, Summers Company received a machine that the company had ordered with an invoice price of $100,000. Freight costs of $880 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine: a. Issued 2,200 shares of Summers Company common stock, par value $1 (market value, $3.50 per share). b. Signed a note payable for $64,000 with an 11.4 percent interest rate (principal plus interest are due April 1 of the current year). c. The balance of the invoice price was on account with the vendor, to be paid in cash by January 12. On January 3, Summers Company paid $2,100 cash for installation costs to prepare the machine for use. On January 12, Summers Company paid the balance due on its accounts payable to the vendor. 1 Part 3 dicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Required information
P8-1 (Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial
Statement Effects of Its Purchase LO8-1, 8-2
[The following information applies to the questions displayed below.]
On January 2, Summers Company received a machine that the company had ordered with an invoice price
of $100,000. Freight costs of $880 were paid by the vendor per the sales agreement. The company
exchanged the following on January 2 to acquire the machine:
a. Issued 2,200 shares of Summers Company common stock, par value $1 (market value, $3.50 per share).
b. Signed a note payable for $64,000 with an 11.4 percent interest rate (principal plus interest are due April 1
of the current year).
c. The balance of the invoice price was on account with the vendor, to be paid in cash by January 12.
On January 3, Summers Company paid $2,100 cash for installation costs to prepare the machine for use.
On January 12, Summers Company paid the balance due on its accounts payable to the vendor.
P8-1 Part 3
3. Indicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to
account categories as negative amounts.)
Date
Jan 02
Jan 03
Jan 12
Assets
Liabilities
Stockholders' Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef0b92b1-f8ea-4fe6-9288-439e092fe743%2F6665cdda-2f0d-4076-9e7d-594f1f2e59cd%2Fxqwvqqx_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
P8-1 (Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial
Statement Effects of Its Purchase LO8-1, 8-2
[The following information applies to the questions displayed below.]
On January 2, Summers Company received a machine that the company had ordered with an invoice price
of $100,000. Freight costs of $880 were paid by the vendor per the sales agreement. The company
exchanged the following on January 2 to acquire the machine:
a. Issued 2,200 shares of Summers Company common stock, par value $1 (market value, $3.50 per share).
b. Signed a note payable for $64,000 with an 11.4 percent interest rate (principal plus interest are due April 1
of the current year).
c. The balance of the invoice price was on account with the vendor, to be paid in cash by January 12.
On January 3, Summers Company paid $2,100 cash for installation costs to prepare the machine for use.
On January 12, Summers Company paid the balance due on its accounts payable to the vendor.
P8-1 Part 3
3. Indicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to
account categories as negative amounts.)
Date
Jan 02
Jan 03
Jan 12
Assets
Liabilities
Stockholders' Equity
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