Application Technologies has acquired equipment costing $15,000.The company paid $5,000 and gave a 10-month note for the balance.The bookkeeper should
A)debit Equipment for $15,000,credit Cash for $5,000,and credit Notes Receivable for $10,000.
B)debit Cash for $5,000,debit Notes Receivable for $10,000,and credit Equipment for $15,000.
C)debit Equipment for $15,000,credit Cash for $5,000,and credit Notes Payable for $10,000.
D)debit Cash for $5,000,debit Notes Payable for $10,000,and credit Equipment for $15,000.
E)debit Equipment for $15,000,debit Cash for $5,000,credit Notes Payable for $10,000,and credit Paid-in Capital for $5,000.

Question

Quizplus · Accepted Answer

The correct journal entry to record the acquisition of equipment involves debiting Equipment for the total cost of $15,000, crediting Cash for the down payment of $5,000, and crediting Notes Payable for the balance of $10,000. This reflects the company's increase in assets (equipment) and the decrease in cash, while also recognizing the liability (note payable) for the remaining amount owed.

Application Technologies Has Acquired Equipment Costing $15,000