A Business Purchases Equipment by Paying $8,000 in Cash and Issuing

question 70

Multiple Choice

A business purchases equipment by paying $8,000 in cash and issuing a note payable of $12,000. Which of the following occurs?

• A)Cash is credited for $8,000; Equipment is credited for $20,000; and Notes Payable is debited for $12,000.
• B)Cash is credited for $8,000; Equipment is debited for $20,000; and Notes Payable is credited for $12,000.
• C)Cash is debited for $8,000; Equipment is debited for $12,000; and Notes Payable is credited for $20,000.
• D)Cash is debited for $8,000; Equipment is credited for $12,000; and Notes Payable is debited for $4,000.

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