Kamp Gravel Co purchased three trucks for $50 000 each plus GST by making a $20 000 down payment and agreeing to pay the balance at the end six months.The journal entry to record the acquisition is which of the following?
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Question

Quizplus · Accepted Answer

This journal entry correctly records the acquisition of the trucks by debiting the Trucks account for the full cost, including GST, and crediting the Sundry creditor account for the amount owed after the down payment. The cash payment of $20 000 is also recorded by debiting the Cash account. Option A incorrectly debits the Sundry creditor account for the full cost of the trucks, which does not reflect the down payment. Option C incorrectly debits the Trucks account for $150 000 without recording the GST. Option D debits the Trucks account and credits the Cash account for the down payment, but fails to record the balance owed to the supplier.

Kamp Gravel Co Purchased Three Trucks for $50 000 Each