Final answer:
The subject deals with a business transaction involving a payment for machinery, related to accounting entries on the balance sheet. Similar business transactions include bank loans and early credit purchase campaigns, which also impact financial statements.
Step-by-step explanation:
The question involves a transaction where a payment of $62,500 in cheque is made to Lee Motors for the credit purchase of machinery. This is a business transaction that impacts the financial statements of a company, specifically the balance sheet and possibly the income statement depending on the accounting treatment of the machinery.
In a similar scenario, Singleton Bank lends $9 million to Hank's Auto Supply and records it as an asset on the balance sheet, anticipating interest income. Rather than dispersing cash, the bank provides a cashier's check, which Hank deposits into his checking account, causing First National's deposits and reserves to increase by $9 million. First National is obliged to hold a portion of these deposits as required reserves but can loan out the remainder.Another historical example of credit purchase is the strategy used by the Singer Sewing Machine Company with their "Dollar Down, Dollar a Week" campaign, allowing consumers to buy sewing machines on credit, which revolutionized the way consumers viewed credit purchases as investments in efficiency-enhancing equipment.