Question

Create a journal entry and a T-Account for each of the following transactions :

a. $5,000 of accounts payable is paid in cash.

b. $30,000 of cash is received from taking out a note with the local bank.

c. $10,000 of accounts receivable from last year is received in cash.

d. $7,000 is paid back on the borrowed note.

e. $15,000 worth of equipment is purchased on credit.

Answer 1

Date	Account Title	Debit	Credit
a)	Account Payable	$          5,000
	Cash		$          5,000
	( to record payment to account payable)
b)	Cash	$        30,000
	Note Payable		$        30,000
	( to record note payable against cash )
c)	cash	$        10,000
	account receivables		$        10,000
	( to record collection fo account receivables)
d)	Note Payable	$          7,000
	cash		$          7,000
	(to record cash payment towards note payable)
e)	Equipment ( assets )	$        15,000
	Account Payable		$        15,000
	( to record purchase of equipment)