A company entered into the following transaction: Purchased equipment for use in the business at a cost of $12,000, one-fourth was paid in cash and the company signed a note for the balance. Choose the TRUE
Statement about the journal entry to record this transaction.

Question

Quizplus · Accepted Answer

The company paid one-fourth in cash ($3,000) and signed a note for the remaining balance ($9,000). Therefore, the journal entry will include a credit to Notes payable for $9,000.

A Company Entered into the Following Transaction: Purchased Equipment for Use