A company purchased office equipment for $24,500 and paid $1,470 in sales tax, $550 for installation, $3,200 for a needed adjustment to the equipment, and $2,600 for supplies that will be used for periodic routine
Maintenance. What is the journal entry to record this purchase?

Question

Quizplus · Accepted Answer

Option B correctly accounts for the purchase of the office equipment, including the sales tax, installation, adjustment, and supplies. The debit to Office Equipment for $24,500 reflects the cost of the equipment, and the debits to Sales Tax, Installation, Adjustment Expense, and Maintenance Supplies Expense account for the additional costs associated with the purchase. The total debits equal the total amount paid for the equipment and related expenses. The credit to Cash indicates how the purchase was funded.

A Company Purchased Office Equipment for $24,500 and Paid $1,470