Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 49)
If a company purchases equipment with a cash down payment and a note payable, what is the correct journal entry?
Debit Equipment; Credit Cash, Credit Notes Payable
Debit Equipment, Credit Cash; Credit Notes Payable
Debit Cash; Credit Equipment, Credit Notes Payable
Debit Equipment, Debit Cash; Credit Notes Payable
Explanation
Equipment (asset) increases, cash decreases (credit), and notes payable (liability) increases.
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