The Pun It vending store chain buys new candy machines for $450,000 end pays $50

Question

The Pun It vending store chain buys new candy machines for $450,000 end pays $50,000 for, installation One half of the total cash paid cash, the other half is financed How should the company record this transaction? Debit equipment for $460,000. debit expenses for $50,000 $. Credit cash for $250,000 and credit notes payable for $250,000 Debit equipment for $500,000. Credit cash for $250,000 and credit notes payable for $250000 Debit cash for $250,000. Debit notes payable for $250000 and credit equipment for $500,000 Debit cash for $250,000. Debit notes payable for $250,000 credit equipment for $450000 and credit expenses for $50,000.

Explanation / Answer

Debit the Equipment by $500000 and credit cash by $250000 and notes payable cr by $250000

As Equiment is purchased so the cost of purchase which includes installation cost is debited and cash is given so credited and the balance half is credited by the liability created as notes payable.

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