1. RECORDING THE BUYING OF A PLANT ASSET
January 2, 20X1. Paid cash for a display case, $1,250.00. Check
No. 7.
Store Equipment
1. Which accounts are affected?
Store Equipment Debit
Normal Balance
Cash
1,250.00
2. How is each account classified? 
Store Equipment is an asset account.
Cash is an asset account. Cash
Debit
3. How is each classification changed? Normal Balance
Assets are increased. 1,250.00

Assets are decreased.
4. How is each amount entered in the accounts?
Assets increase on the debit side.
Assets decrease on the credit side. Lesson 21-1, page 548
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2. RECORDING THE BUYING OF A PLANT ASSET
4 3
1
2
1. Account Title
2. Cost of the
Plant Asset
3. Cash Paid
4. Post
Lesson 21-1, page 548
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Educational Publishing

3. CALCULATING AND PAYING PROPERTY TAX
February 1. Harrison Manufacturing paid cash for property tax,
$840.00. Check No. 187.
+ − Assessed Value × Tax Rate = Annual Property Tax
÷ × $70,000.00 × 1.2% = $840.00
Property Tax Expense Cash
Debit Debit
Normal Balance Normal Balance
840.00 840.00


Lesson 21-1, page 549
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Educational Publishing

4. TERMS REVIEW
current assets
plant assets
real property
personal property
assessed value
Lesson 21-1, page 550
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Educational Publishing