On February 5, Textron Stores Purchased a Van That Cost

question 52

Essay

On February 5, Textron Stores purchased a van that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

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Definitions:

Gross Investment

A company’s total investment in plant, equipment, and inventory. Also, a nation’s plant, equipment, inventory, and residential housing investment.

Depreciation

The process of allocating the cost of a tangible asset over its useful life.

Government Purchases

Expenditures by government entities on goods and services that are consumed in the provision of public services and for public investment.

Net Exports

The value of a country's total exports minus its total imports, reflecting the balance of trade.