The Gulp Convenience Store Chain Buys New Soda Machines for $450,000

question 47

Multiple Choice

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation. One-half of the total cost is paid in cash; the other half is financed. How should the company record this transaction?

• A) Debit cash for $250,000, debit notes payable for $250,000, and credit equipment for $500,000.
• B) Debit equipment for $500,000, credit cash for $250,000, and credit notes payable for $250,000.
• C) Debit cash for $250,000, debit notes payable for $250,000 credit equipment for $450,000, and credit expenses for $50,000.
• D) Debit equipment for $450,000, debit expenses for $50,000, credit cash for $250,000, and credit notes

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