When a Company Purchases Equipment by Issuing a Long-Term Note

question 122

True/False

When a company purchases equipment by issuing a long-term note, the interest element of the payment is tax deductible. However, if the company leases equipment, the entire lease payment may be tax deductible.

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Definitions:

Ionic Compound

A substance made up of positively and negatively charged ions that are combined in a ratio to neutralize the charges.

Bromine

A reddish-brown liquid at room temperature, with the elemental symbol Br, and atomic number 35; it is a halogen and is used in various industrial applications.

Magnesium

A lightweight, silver-white metallic element, crucial for cellular metabolism and found in chlorophyll, often used in alloys and as a dietary supplement.

Ionic Compound

A chemical compound composed of ions held together by electrostatic forces termed ionic bonding, usually formed between metal and non-metal ions.