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In order to better track inventory, GBI ordered a bar-coding and tracking system which will be installed and tested by computer specialist, inc. (csi). The system will allow employees to track inventory using mobile devices and special software which will link into their new computerized accounting system. The barcode system costs $6,995 (including sales tax) and CSI will charge GBI $1200 for the installation and tests. GBI paid a deposit of $4,000 on the system and the remainder is due and payable when the system is installed. GBI will classify the bar-coding system as "Production Machinery, Equipment and Fixtures".
A business makes a principle payment of cash on a note payable. The note payable was originally issued for the purchase of equipment. Which of the following occurs?
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