A company entered into the following transaction: Purchased equipment for use in the business at a cost of $12,000,one-fourth was paid in cash and the company signed a note for the balance.Choose the TRUE statement about the journal entry to record this transaction.
A)The journal entry will include a debit to Notes Payable of $9,000.
B)The journal entry will include a debit to Cash of $12,000.
C)The journal entry will include a credit to Notes Payable of $9,000.
D)The journal entry will include a debit to Equipment of $3,000.

Question

Quizplus · Accepted Answer

The company paid one-fourth in cash ($3,000) and signed a note for the remaining balance ($9,000), so the journal entry will include a credit to Notes Payable of $9,000.

A Company Entered into the Following Transaction: Purchased Equipment for Use