Crown King Burgers purchased new soda machines for $900,000 and pays $100,000 for installation costs. One-half of the total cost or $500,000 is paid in cash; a note in the amount of $500,000 is signed. How should the company record this transaction?
A. Debit Cash for $500,000, debit Notes Payable for $500,000, and credit Equipment for $1,000,000.
B. Debit cash for $500,000, debit Notes Payable for $500,000, credit Equipment for $900,000, and credit Operating Expenses for $100,000.
C. Debit Equipment for $900,000, debit Operating Expenses for $100,000, credit cash for $500,000, and credit Notes Payable for $500,000.
D. Debit Equipment for $1,000,000, credit Cash for $500,000, and credit Notes Payable for $500,000.
D. Debit Equipment for $1,000,000, credit Cash for $500,000, and credit Notes Payable for $500,000.
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a. a premium b. their face value c. their maturity value d. a discount