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?

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Business

Naveen

26 July, 00:01

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?

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Luca Peck · 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