Question

1A-1. Melody Abington decided to open Melody’s Nail Spa. Melody completed the following transactions:

1. Invested $19,000 cash from her personal bank account into the business.

2. Bought store equipment for cash, $3,400.

3. Bought additional store equipment on account, $6,100.

4. Paid $1,200 cash to partially reduce what was owed from Transaction C.

Answer 1

Transaction : C

Bought additional store equipment on account, $6,100.

Explanation:

1) Here, Equipment is bought. It's an asset . To show an increase in asset, it is debited.

2) Equipment is bought on account, which means payment would be made on later stage. so we owe to the seller, and to show the same we increase the liability account ( i.e. accounts payable)

3) Journal entry would be as follow:

Date	Account Name	Debit	Credit
1.	Equipment	$6100
	To Accounts payable		$6100