Asset account will be debited with $10,000 and cash account and vendor account should be credited with $2,000 and $8,000 respectively.
Further Explanation:
Fixed asset:
The fixed asset is an asset that is held in the business for more than a year. Fixed assets are used for the operational process of the business. It includes both tangible and intangible assets. As the assets have a useful life of more than a year then these assets are depreciated on a yearly basis.
Journal entry for the purchase of forklift:
In the given case, a forklift is purchased for $10,000. There is a down payment of $2,000 and the rest $8,000 is still due to the vendor. Journal entry would be recorded as follows:
The forklift has a life for more than a year so it will be considered as a fixed asset. An asset account is debited because the asset is purchased for $10,000. There is a down payment of $2,000. Cash will be credited because cash has been paid. There is still a due of remaining amount $8,000 (10,000 - $2,000). This account will also be credited by the name of the vendor.
Thus, the asset account will be debited with $10,000 and cash account and vendor account should be credited with $2,000 and $8,000 respectively.
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Answer details:
Grade: Senior School
Subject: Accounting
Chapter: Journal Entries
Keywords: A new, forklift, is, purchased, for, $10,000, with $2,000, down, in cash, and, the remainder, due, in 60, days. the journal entry would include, journal entry, asset, cash, vendor, accounting.
Journal entry for the purchase of forklift:
