Joe Donaldson Deposited $80,000 in a Bank Account, Purchased a Company

question 26

Multiple Choice

Joe Donaldson deposited $80,000 in a bank account, purchased a company for $60,000 cash (Building $40,000 and Inventory $20,000) , performed services for clients for $10,000 cash, purchased supplies for $5,000 cash, and paid utilities of $2,000 cash. The journal entry to record the purchase of the company includes a:

• A)credit to Building for $40,000.
• B)debit to Common Stock for $60,000.
• C)debit to Inventory for $20,000.
• D)credit to Cash for $40,000.

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