Question

Multiple Choice Question 70 Coronado Mail Service purchased equipment for $2460. Coronado paid $370 in cash and signed a note for the balance. Coronado debited the Equipment account, credited Cash and nothing further must be done. debited the retained earnings account for $2090. credited another asset account for $370. credited a liability account for $2090.

Answer 1

Answer:
The entry for Purchase of Equipment by cash and Notes payable is recorded as,
Account Titles and Explanations	Debit	Credit
Equipment	$ 2,460
Cash		$ 370
Accounts (or) Notes Payable                        ( $ 2,460 (-) $ 370 )		$ 2,090
(To record the Purchase of Equipment )
Coronado debited the Equipment account, credited Cash and Should be Credited a liability account for $ 2,090
Since Accounts (or) Notes Payable is Liability account and it is Credited with an amount of $ 2,090