Business Transaction 25:

On January 1, 2020, ABC Company purchased equipment for $50,000 cash.

Journal Entry:
Equipment $50,000
Cash $50,000

Ledger:
Equipment $50,000
Cash $50,000

Trail Balance:
Debit: Equipment $50,000
Credit: Cash $50,000

Final Accounts:
Balance Sheet:
Assets:
Equipment $50,000

Explanation:
1. Journal Entry: This transaction involves the purchase of equipment for $50,000, which is paid in cash. The journal entry records the movement in the cash and equipment accounts.

2. Ledger: The ledger records the individual accounts involved in the transaction. The equipment account is debited, and the cash account is credited.

3. Trail Balance: The trail balance is a list of all the accounts and their balances for a specific period. In this case, the trail balance shows that the equipment account has a debit balance of $50,000, and the cash account has a credit balance of $50,000.

4. Final Accounts: The final accounts are prepared at the end of an accounting period to determine the financial position of a company. In this case, the balance sheet shows that the company has an asset worth $50,000 in the form of the equipment purchased.

Overall, this transaction shows the purchase of equipment in exchange for cash, which is recorded in the journal, ledger, trail balance, and final accounts.

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