Martin's Mail Service purchased equipment for $4,000. Martin paid $500 in cash and signed a note for the balance. Martin debited the Equipment account, credited Cash and

Question

Quizplus · Accepted Answer

Martin signed a note for the balance, indicating that he agreed to pay the remaining $3,500 at a later date. This creates a liability for Martin and therefore the correct answer is to credit a liability account for $3,500.

Martin's Mail Service Purchased Equipment for $4,000