Equipment with a estimated market value of 30000 is offered

Equipment with a estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer\'s accounting records to record this acquisition is

A) $30,000
B) $35,000
C) $15,000
D) $45,000

Solution

Option \"B\')35000 is the answer

The Actual Purchase consideration should be recorded as the amount of purchase in purchase ledger. That is including any Payable and Cash paid.

here in this case 15,000 is paid in cash and remaining 20,000 will be paid after 30days. So Asset Consideration $35,000.

Recording

The Buyer will Record 35,000 in asset ledger

Deduct 15,000 of cash

and In Payables A liability of 20,000