Question

What is the transaction that required the following journal entry: $41,323 debit to Equipment, $8,677 debit to Discount on note payable, and $50,000 credit to Note payable?

1) Acquired an asset in a lump-sum purchase.
2) Acquired an asset by signing a noninterest-bearing note payable.
3) Acquired an asset in a business combination.
4) Acquired an asset by signing an interest-bearing note payable.

Answer 1

The transaction that required the given journal entry is for acquiring an asset by signing a noninterest-bearing note payable. Option 2.

Step-by-step explanation:

The transaction that required the given journal entry of a $41,323 debit to Equipment, $8,677 debit to Discount on note payable, and $50,000 credit to Note payable is 2) Acquired an asset by signing a noninterest-bearing note payable.

This journal entry represents the acquisition of an asset by signing a noninterest-bearing note payable. The $41,323 debit to Equipment indicates the cost of the asset acquired, while the $8,677 debit to Discount on note payable represents a reduction in the amount to be repaid on the note. The $50,000 credit to Note payable reflects the amount of the note taken on to finance the purchase of the asset. Option 2.