Alta Pass Brewing Company purchased additional equipment for $120,000. Alta Pass paid $25,000 in cash and signed a note for the balance. Alta Pass debited Equipment, credited Cash and

Question

Quizplus · Accepted Answer

Since Alta Pass paid $25,000 in cash and signed a note for the balance, it means that they are taking on a liability of $95,000. Therefore, the correct entry would be debiting Equipment, crediting Cash for $25,000, and crediting a liability account for $95,000.

Alta Pass Brewing Company Purchased Additional Equipment for $120,000