Extreme Home bought painting equipment on account for $2,100.The entry would include:

Question

Quizplus · Accepted Answer

The purchase of painting equipment on account indicates that Extreme Home did not pay for the equipment immediately with cash, but instead received a bill to pay at a later date. This means that the entry should have a debit to the asset account Equipment for $2,100 (since they now own the equipment) and a credit to the liability account Accounts Payable for $2,100 (since they owe the money to the supplier). Therefore, option C is the correct answer. Options A and D suggest the purchase was made with cash, which is not indicated in the question. Option B suggests that the purchase was fully paid for at the time of acquisition, but this is not the case.

Extreme Home Bought Painting Equipment on Account for $2,100