Explain how would recording the $7,000 million to the Equipment account “delay expense recognition to future periodS” and thus “boost net income for Year 1.” (Ignore tax as tax rules for capitalization and depreciation are different from financial accounting rules.)

Explain how would recording the $7,000 million to the Equipment account “delay expense recognition to future periodS” and thus “boost net income for Year 1.” (Ignore tax as tax rules for capitalization and depreciation are different from financial accounting rules.)

Besides net income in the income statement, total assets in the balance sheet would also be wrong.