Accounting MCQ Accounting Chapter 9 On January 2, 2006, a company buys new equipment and signs a note agreeing to pay $235,000 on December 31, 2007, The amount represents the cash equivalent price of the equipment plus interest for two years. Equipment should be debited and notes payable should be credited for $235,000.

On January 2, 2006, a company buys new equipment and signs a note agreeing to pay $235,000 on December 31, 2007, The amount represents the cash equivalent price of the equipment plus interest for two years. Equipment should be debited and notes payable should be credited for $235,000.

Naim 22:33 Accounting Chapter 9

On January 2, 2006, a company buys new equipment and signs a note agreeing to pay $235,000 on December 31, 2007, The amount represents the cash equivalent price of the equipment plus interest for two years. Equipment should be debited and notes payable should be credited for $235,000.

Answer: False - In conformity with the cost principle, the cost of the equipment is its current cash equivalent price, which is the present value of the future payment.

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Accounting MCQ

On January 2, 2006, a company buys new equipment and signs a note agreeing to pay $235,000 on December 31, 2007, The amount represents the cash equivalent price of the equipment plus interest for two years. Equipment should be debited and notes payable should be credited for $235,000.

On January 2, 2006, a company buys new equipment and signs a note agreeing to pay $235,000 on December 31, 2007, The amount represents the cash equivalent price of the equipment plus interest for two years. Equipment should be debited and notes payable should be credited for $235,000.

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