On June 1, 2011 Quang Le Buys a Copier Machine

question 116

Multiple Choice

On June 1, 2011 Quang Le buys a copier machine for his business and finances this purchase with cash and a note.When journalizing this transaction, he will

• A)use two journal entries.
• B)make a compound entry.
• C)make a simple entry.
• D)list the credit entries first, which is proper form for this type of transaction.

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Definitions:

Non-Cancelable Lease

A lease agreement that cannot be terminated before its expiration date by either the lessee or the lessor without incurring penalties.

Economic Life

The estimated period over which an asset is expected to be economically useful to its owner or the duration it can generate revenue, beyond which it is not cost-effective to operate.

Warranty

A guarantee, typically from a manufacturer or seller, promising to repair or replace defective goods within a specified time period.

Lease Liability

A financial obligation representing the present value of future lease payments that a lessee is required to make under a lease agreement.