Author Question: Welby County Hospital entered into a capital lease to purchase a new MRI machine. The capitalizable ... (Read 103 times)

Kthamas · **on:** Jul 5, 2018

Welby County Hospital entered into a capital lease to purchase a new MRI machine. The capitalizable cost of the equipment was 400,000 and the hospital made a 40,000 down payment.

The entry required when the asset was acquired was

Debit Credit
A. Equipment
Other Financing Sources Capital Lease
Cash 400,000
360,000
40,000
B. Expenditures
Other Financing Sources Capital Lease
Cash 400,000
360,000
40,000
C. Equipment
Expenditures
Lease Payable
Cash 360,000
40,000

360,000
40,000
D. Equipment
Lease Payable
Cash 400,000
360,000
40,000

Question 2

During the closing process, some balance sheet accounts are closed and end the period with a zero balance.
a. True
b. False

Indicate whether the statement is true or false