Heritage Architect Company of Manitoba purchased some modular office furniture on March 10, 2020 that had a

Question:

Heritage Architect Company of Manitoba purchased some modular office furniture on March 10, 2020 that had a cost of $290,000 (ignore GST/PST). Show the journal entries that would record this purchase and payment under these three separate situations:

a. The company paid cash for the full purchase price.

b. The company purchased the furniture on credit with terms 1/30, n/60. Payment was made on April 9, 2020.

c. The company signed a 10%, one-year note for the full purchase price. The note was paid on March 10, 2021, the maturity date. Ignore year-end accruals.

Analysis Component: What would the impact be on the financial statements at year-end if the company signed a note? What ratio would be affected?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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