Unformatted text preview: ction: Purchases leasehold improvements by signing a long term note. (borrows $$)
Rules: Increases to assets are debited, increases to liability accounts are credited. This is a long
term liability (note is for 2 years) so account would correctly be classified as a "note payable",
and considered a long term liability.
Journal entry: Debit to Leasehold Improvements, Credit to Notes Payable
Jan 7 Leasehold Imp.
Notes Payable 4. Cr. 3,000
3,000 Post to the general ledger: Leasehold Imp Notes Payable 1/7 3,000 1/7 3,000 January 25: Paid for office supplies that were purchased on 1/6.
3. Transaction: Paying debt that is owed in cash. Accounts p...
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