A Business Purchased a Building by Paying Part of the Purchase

question 82

Multiple Choice

A business purchased a building by paying part of the purchase price in cash as a down payment and signing a mortgage note for the remainder.The business should:

• A) debit the mortgage note payable for the amount of the mortgage.
• B) debit the building account for the amount of the mortgage.
• C) debit cash for the amount paid on the down payment.
• D) credit the mortgage note payable for the amount of the mortgage.

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Definitions:

Consideration

In contract law, it refers to something of value exchanged between parties, which is necessary for the formation of a legally binding contract.

Sued

The action of bringing a lawsuit against an individual or entity, claiming wrongdoing or seeking remedies under law.

Unconscionable

A situation or term in an agreement that is so unjust or overwhelmingly one-sided in favor of the party with more power that it is deemed unenforceable under law.

Shocks the Conscience

A legal standard for determining whether a legal or governmental decision is so unjust or egregious that it violates fundamental fairness.