owners take precedence over creditors.
All of the choices are possible: it depends on the situation
owners and creditors are treated equally
creditors take precedence over owners

The company pays $4,000 in cash and $6,000 in notes payable to buy $10,000 equipment
The company buys $10,000 of equipment for $4,000 in cash and 6,000 on credit
The company sells $10,000 of equipment for $4,000 in cash and $6,000 on credit
The company sells $10,000 of equipment for $4,000 in cash and pays off $6,000 it owes on the equipment





dr
Cash-
4,000



dr
Notes Receivable
6,000



cr
Equipment

10,000

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I think the answer is the company sells $10,000 of equipment for $4,000 in cash and $6,000 on credit.

Yes that is one possible answer what was your answer for the first part of the question?

Yes that is one possible answer what was your answer for the first part of the question?

Creditors take precedence over owners.

Well done