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Unformatted text preview: cash down payment and obtaining a three-year note payable for the remaining $18,000. This transaction is recorded by debiting (increasing) the vehicles account for $20,000, crediting (increasing) the notes payable account for $18,000, and crediting (decreasing) the cash account for $2,000. The debits and credits total $20,000, and the accounting equation remains in balance because the $18,000 net increase in assets is matched by an $18,000 increase in liabilities. After these three transactions, the company has $68,000 in assets (cash $18,000; equipment $30,000; vehicles $20,000) and $68,000 in liabilities (notes payable)....
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- Fall '10