Why a.b.e are the answer? Why a.b.e are the answer? Please explain,thank you ver

Question

Why a.b.e are the answer? Why a.b.e are the answer? Please explain,thank you very much. Taylor Co. bills a client $48,000 for services provided and agrees to accept the following three items in full Exercise 2-5 payment: (1) $7,500 cash, (2) computer equipment worth $75,000, and (3) to assume responsibility for a Analyzing effects of $34,500 note payable related to the computer equipment. The entry Taylor makes to record this transaction transactions on accoun includes which one or more of the following? a. $34,500 increase in a liability account d· $48,000 increase in an asset account b. $7,500 increase in the Cash account c.$7,500 increase in a revenue Al a be e. $48,000 increase in a revenue account account . $34,500increase in an equity account

Explanation / Answer

Apart from cash received for services, assets and liability is alsi received whose net value is 40500 (75000-34500)

Net Assets Reveived = 7500+40500 = 48000

Service provided is also 48000 that is why the entry would be as under:-

Particulars Debit Credit Cash 7500 Computer Equipment 75000      Note Payable 34500       Revenue 48000

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