Purchased a building by paying $50,000 cash and issuing a $450,000 mortgage note payable

Expert Solution

The transaction will lead to cash payment of $50,000

Though the total value of building purchased shall be $500,000 ($50,000 + $450,000), the actual cash payment shall be $50,000. There will no other cash flow involved in the transaction. The issuing of mortgage note payable will lead to future cash flows but no upfront cash flow.

ekkarill92 answered 2 years ago

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