Homework Answers
Cost of equipment = $100,000
Cash paid = $40,000
Remaining $60,000 will be paid after 6 months.
Due to the given transaction:
- Total assets will increase by $60,000
- Total liabilities will increase by $60,000.
Total expenses and equity will not be effected.
First option is correct.
Kindly comment if you need further assistance.
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