[Q1] The entity purchased new equipment and paid $150,000 in cash.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Equipment | 150,000 | |
| Cash | 150,000 |
[Notes]
Debit: Increase in equipment
Credit: Decrease in cash
[Q2] The entity purchased $150,000 new equipment on account.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Equipment | 150,000 | |
| Accounts payable | 150,000 |
[Notes]
Debit: Increase in equipment
Credit: Increase in accounts payable