Question

Equipment with an estimated market value of $55,000 is offered for sale at $75,000. The equipment is acquired for $20,000 in cash and a note payable of $40,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is__________.

Answer 1

Answer:

$60,000

Explanation:

The computation of recording the acquisition is shown below:

= Acquired value of equipment for cash + Acquired value of equipment for a note payable

= $20,000 + $40,000

= $60,000

At the time of recording the acquisition of the equipment on the buyer accounting records, we considered the acquired value for cash and for a note payable only.