Question

Prepare a journal entry to record the purchase supplies on 01/01/2018 for $20,000; paying cash of $5,000 and the balance on account.

Answer 1

Journal entry to record purchase for which partial payment is done will increase the purchase account and will decrease the cash amount with the amount paid in cash and also will increase the liability as outstanding amount to be paid.

Total purchase = 20,000

Cash paid = 5,000

Outstanding amount = 15,000

Journal entry

Purchase supplies account debit $20,000

To cash account credit. $5,000

To accounts payable account credit. $15,000.

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