Quebec Construction Company purchased some equipment on September 10, 2020, that had a cost of $190,000 (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 equipment on credit with terms 1/30, n/60. Payment was made on October 9, 2020.

c. The company signed a 12%, one-year note for the full purchase price. The note was paid on September 10, 2021, the maturity date. Ignore year-end accruals.

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