Question

A company purchased equipment for use in the business at a cost of $36,000, one-fourth was paid in cash, and the company signed a note for the balance. The journal entry to record this transaction will include a:

Answer 1

Answer:

1. Dr Equipment     36000

       Cr     Cash                  9000

       Cr Notes payable       27000

  ( To record entry of equipment purchase on cash and on promissory note)

Explanation:

Equipment =  36000

Paid in cash = 36000 /4 =9000 and balance 36000-9000=27000 to be signed promissory note.