[Anonymous]

Becker Question –

There is this journal entry

DR franchises 62,908

DR discounts on notes payable 12092

CR notes payable 50,000

CR cash 25,000

ok, i understand franchises is an asset account, discounts on note payable is a contra liability account

and notes payable is a liability account, cash is asset.

Asset= Liabilities+ Owner’s equity

62,908 50,000

12,092

-25000

My question – does this journal entry and my understanding of it look right to you?

[tpenick]

I am confused what you about what mean when you say your understanding. Are you saying that the net change in your assets is 50,000 and you net change in liabilities is 50000? If so, then no that is not correct. Your net change in assets is $37,908 as is your net change in liability. Do you understand why this JE is being made?

[tpenick]

I am confused what you about what mean when you say your understanding. Are you saying that the net change in your assets is 50,000 and you net change in liabilities is 50000? If so, then no that is not correct. Your net change in assets is $37,908 as is your net change in liability. Do you understand why this JE is being made?

[Anonymous]

Thanks tpenick.i think you made it more clear. I haven't touched JE for some time, i'm getting familiar with it. I appreciate your help!

[Anonymous]

Thanks tpenick.i think you made it more clear. I haven't touched JE for some time, i'm getting familiar with it. I appreciate your help!

[Author]

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