Question

Caryâs 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, Caryâs Carpeting Cleaning pays $8,000 to the equipment supplier. Prepare the appropriate journal entry for the payment on April 30. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer:

Account payable A/c Dr $8,000

     To Cash A/c $8,000

(Being the payment is recorded)

Explanation:

The journal entry is shown below:

On April 30

Account payable A/c Dr $8,000

     To Cash A/c $8,000

(Being the payment is recorded)

As the cash is paid which reduces the cash balance so this account should be credited plus the account payable account should be credited so that the proper posting can be done.