S. Gunner purchased a piece of equipment costing $6,000. She paid $1,000 immediately and put the rest on account. Show how to record this transaction to the T-accounts by selecting the correct answer below.

Question

Business

Remington Wolf

27 May, 17:58

S. Gunner purchased a piece of equipment costing $6,000. She paid $1,000 immediately and put the rest on account. Show how to record this transaction to the T-accounts by selecting the correct answer below.

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Answers (1)

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Landyn Bush · Answer 1

6,000 on the left side of Equipment account; $5,000 on the right side of Accounts payable account; $1,000 on the right side of the Cash account

Explanation:

When fixed assets are bought whether paid for or not, debit the asset account with the monetary value if the asset, and credit cash or bank if payment is made or credit account payable account where purchase is on credit.

In this case, the following entries should be done:

Debit Equipment Account $6,000

Credit Cash Account $1,000

Credit Account Payable $5,000