Joshua Scott purchase equipment for $40,000 on account. How would the journal en

Question

Joshua Scott purchase equipment for $40,000 on account. How would the journal entry for this transaction be entered in the journal?

A) Equipment.                 40,000
     Account Receivable.                   40,000
B) Cash.                           40,000
     Equipment.                                 40,000
C) Equipment.                 40,000
     Cash.                                           40,000
D) Equipment.                 40,000
     Account Payable.                       40,000

Explanation / Answer

The Journal Entry For The Purchase Of equipment For $40000 on Account Is

D. Equipment.                 40,000
     Account Payable.                       40,000

Since Equipment Is real Account The rule is Dr what Comes in So The equioment is coming into the business

and as we are purchasing equipment the accounts Payable is Credited

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