The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to building and a credit to note payable and to cash.

Question

Quizplus · Accepted Answer

The purchase of a building with a down payment involves debiting the building account for the total purchase price, crediting cash for the amount of the down payment, and crediting note payable for the remaining balance, reflecting the increase in assets (building) and the increase in liabilities (note payable) and decrease in assets (cash).

The Purchase of a Building with a Down Payment of Cash