Grayton Industries purchased supplies for $1,200. They paid $700 in cash and agr

Q: Grayton Industries purchased supplies for $1,200. They paid $700 in cash and agr

Solution: Following journal entry will be recorded for purchase of supplies. Therefore for complete the recording of transaction, cash account will be credited for $700. Hence option a is correct. Journal Entries Particulars Debit Credit Supplies Dr $1,200.00 To Accounts Payable $500.00 To Cash $700.00 (To record supplies purchased)

ID: 2341507 • Letter: G

Question

Grayton Industries purchased supplies for $1,200. They paid $700 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,200, a credit to a liability account for $500. Which of the following would be the correct way to complete the recording of the transaction?

a. Credit cash account for $700.

b. Credit the Grayton, Capital account for $500.

c. Debit the Grayton, Capital account for $700.

d. Credit an asset account for $500.

Explanation / Answer

Solution:

Following journal entry will be recorded for purchase of supplies.

Therefore for complete the recording of transaction, cash account will be credited for $700.

Hence option a is correct.

Journal Entries Particulars Debit Credit Supplies Dr $1,200.00 To Accounts Payable $500.00 To Cash $700.00 (To record supplies purchased)

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Grayton Industries purchased supplies for $1,200. They paid $700 in cash and agr

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