Marvin Company negotiated the purchase of a new building for $250,000. Marvin paid a $100,000 down payment and will pay off the remainder over seven years. What affect does this transaction have on the accounting equation?

Question

Guest

Business

4 October, 02:34

Marvin Company negotiated the purchase of a new building for $250,000. Marvin paid a $100,000 down payment and will pay off the remainder over seven years. What affect does this transaction have on the accounting equation?

+2

Answers (1)

Know the Answer?

Lillie Sheppard · Answer 1

Marvin Company negotiated the purchase of a new building for $250,000. Marvin paid a $100,000 down payment and will pay off the remainder over seven years. What affect does this transaction have on the accounting equation?

This shows after the deposit of $100,000 out of $250,000, the completion of such transaction will take seven years. This means that it will seven years to balance such account, it is not economically wise to do such