• 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

What do YOU think ?
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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?

Quote:

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Originally Posted by paraclete

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

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Creditors take precedence over owners.

Well done