Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co.for $3,100 cash.The entry for this transaction will include a

Question

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The transaction involves the purchase of equipment and supplies by Deerhoof Company from Milkman Co. for $3,100 cash. Since Deerhoof is paying cash, there is no credit to Accounts Payable. The equipment and supplies are assets that Deerhoof is acquiring, so they should be debited. Therefore, the correct entry is a debit to Equipment for $2,700 and a debit to Supplies for $400, both for Deerhoof Company. No credit is needed because cash is being used to purchase the items.

Deerhoof Company Purchases Equipment for $2,700 and Supplies for $400