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PAlgo Explaining the Nature of a LongLived Asset and Determining and Recording the Financial
Statement Effects of Its Purchase LO
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On January Summers Company received a machine that the company had ordered with an invoice price of $
Freight costs of $ were paid by the vendor per the sales agreement. The company exchanged the following on
January to acquire the machine:
a Issued shares of Summers Company common stock, par value $market value, $ per share
b Signed a note payable for $ with an percent interest rate principal plus interest are due April of the
current year
c The balance of the invoice price was on account with the vendor, to be paid in cash by January
On January Summers Company paid $ cash for installation costs to prepare the machine for use.
On January Summers Company paid the balance due on its accounts payable to the vendor.
P Part
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.
