Homework Answers
Journal entry to record the transaction:
1. Purchase of equipment for $16,000, paying $9,000 in cash and executing a $7,000 note payaable.
| Date | Accounts title and explanation | Debit | Credit |
| Equipment A/c Dr. | $16,000 | ||
| To Cash A/c Cr. | $9,000 | ||
| To Note payable A/c Cr. | $7,000 | ||
| (To record the acquistion of equipment by payment in cash for $9,000 and note payable for $7,000) |
From the above, net increase in total assets = Increase in equipment ($16,000) less Decrease in cash ($9,000) = $7,000
Correct answer is net increase in total assets of $7,000.
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