Heckart Corporation purchased plant assets for $120,000 cash.The journal entry to record the outflow of cash is:

Question

Quizplus · Accepted Answer

The journal entry to record the outflow of cash is a debit to Plant Assets for $120,000 and a credit to Cash for $120,000. Therefore, option B is the correct entry. Option A is incorrect because it incorrectly debits Investments instead of Plant Assets. Option C is incorrect because it creates a new account, Purchases, which is not necessary. Option D is incorrect because it uses an incorrect account, Purchases, instead of Plant Assets.

Heckart Corporation Purchased Plant Assets for $120,000 Cash