July 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast Off! The
Question:
July 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast Off! The business is a recreation area offering three large waterslides (called “tubes”)—one children's slide, an inner tube run, and a looping extreme slide.
2 Bought Blast Off! in its entirety for a total price of $540,800. The assets include pool furniture, $3,800; the pool/slide facility (includes filter system, pools, pump, and slides), $148,800; building, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder.
My questions are, on the first one, do I record that as a debit of $135k to cash and a credit of $135k to capital? Also, on the second one, do I add the $540,800 onto the $135k in capital??
Update: But the amounts equalling the $540,800 will be added to assets (pool furniture, facility, building, land). So would that not increase the capital?
Probability & Statistics for Engineers & Scientists
ISBN: 978-0130415295
7th Edition
Authors: Ronald E. Walpole, Raymond H. Myers, Sharon L. Myers, Keying