Question

Page But 5 20. $20.000 machine 18 purchased by paying $5,000 cash and sory note to the remainder. The Journal entry would $5,000 cash and lunga promissory note for the incluce a: a. credit to Notes Receivable. b. credit to Machinery. c. credit to Notes Fayable. d. cebit to Cash. 21. Which of the following is not a valid adjusting entry? a. Debit interest expense, credit interest payable. b. Debit supplies expense, credit supplies c. Debit unearned revenue, credit service revenue d. Debit insurance expense, credit cash Which of the following accounts gets closed? a. Sales b. Cash c. P.ccount Receivable d. Interest Receivable The ac justing entry to record expired insurance would be to debit and credit Insurance Expense, Prepaid Insurance b. Insurance Expense, Cash c. Cash, Insurance Expense d. Prepaid Insurance, Cash 24. The adjusting entry to record accrued salaries would be debit and credit what account? a. Salaries Expense, Cash Cash, Salaries Expense Salaries Expense, Salaries Payable None of the above 25. The Store Supplies account had a $180 debit balance at the end of the accounting period before adjustment for supplies used, and an inventory of $40 worth of unused supplies was on hand. Which of the following is the required adjusting entry? a. Debit Store Supplies $40 and credit Store Supplies Expense $40. Debit Store Supplies Expense $40 and credit store Supplies $40. Debit Store Supplies Expense $140 and credit Store Supplies $140 d. Debit Store Supplies $140 and credit Store Supplies Expense $140.

Answer 1

20)

The correct answer is c) A credit to Notes Payable:

Supporting explanations:

When machinery is purchased, its balance increases and its always has debit balance so it is debited and when cash is paid, it decreases and always it has debit balance because it is also an asset like machinery so when it decreases, it is credited. When note is issued for the remaining balance of $15,000 ($20,000 - $5,000), the note is payable in future period so it is a liability and it always has a credit balance so when its balance increases, it is credited.

The same is shown in the below journal entry -

Account Titles and Explanations	Debit	Credit
Machinery	$20,000
Cash		$5,000
Notes Payable ($20,000 - $5,000)		$15,000
(To record the purchase of machinery by cash for $5,000 and remainder by issuing a note)

Therefore, all of the options given are incorrect except the option C) which has a credit to notes payable.

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