TransAm Mail Service purchased equipment for $2,500.TransAm paid $400 in cash and signed a note for the balance.TransAm debited the Equipment account, credited Cash and

Question

Quizplus · Accepted Answer

The correct accounting entry for purchasing equipment with part cash and part note payable involves debiting the Equipment account for the total purchase price ($2,500), crediting Cash for the amount paid in cash ($400), and crediting a liability account (Notes Payable or similar) for the balance owed ($2,100). This reflects the increase in assets (equipment) and the decrease in assets (cash) along with the increase in liabilities (note payable).

TransAm Mail Service Purchased Equipment for $2,500