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Required information P8-1(Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording...

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Accounting

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 $790 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 $50,000 with an 10.5 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
Indicate the effects of the purchase and subsequent cash payment on the accounting equation.
Note: Enter decreases to account categories as negative amounts.
Answer is not complete.
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