Billton Company purchased a machine in the current year for $18,000. Payment included cash, $5,000; a one-year note payable, $5,000; and a 2-year, $8,000 note payable. This decreases cash by $5,000 in the current year.

Question

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The statement is true. The purchase of the machine using cash, a one-year note payable, and a 2-year note payable would decrease cash by $5,000 in the current year.

Billton Company Purchased a Machine in the Current Year for $18,000