Goodyear Co. purchased $5,000 of equipment with a $5,000 cash payment. Goodyear Co. should

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When Goodyear Co. purchased equipment with a cash payment, it should debit the Equipment asset account for $5,000 and credit the Cash asset account for $5,000. This reflects the decrease in Cash and the increase in Equipment. Option A is the only choice that reflects this proper accounting treatment. Option B is incorrect because shareholders' equity should not be involved in a transaction involving the purchase of equipment. Option C involves a liability, which is not relevant to this transaction. Option D is incorrect because an entry is required to reflect the purchase of equipment with cash.