Question

"Cary’s Carpet Cleaning, Inc. purchased $10,000 of carpet cleaning equipment, paying $2,000 cash and giving an informal promise to pay $8,000 at the end of the month. On April 30, Cary’s Carpeting Cleaning pays $8,000 to the equipment supplier."Prepare the appropriate journal entry for the payment on April 30.

Answer 1

Answer:

Carpet Cleaning, Inc. purchased $10,000 of carpet cleaning equipment.

Cash paid = $2,000

Giving an informal promise to pay at the end of the month = $8,000

The journal entry is as follows:

On April 30,

Accounts payable A/c Dr. $8,000

       To cash A/c                             $8,000

(To record the payment for the equipment on April 30.)