Question

Prarie Clinic purchased X-ray equipment for $4,000, paid $1,275 down, with the remainder to be paid later. The correct entry would be

Entry: Debit Credit
A. Equipment $1,275 Cash $1,275
B. Cash $1,275
Accounts Payable $2,725
Equipment $4,000
C. Equipment Expense $4,000
Accounts Payable $1,275
Cash $2,725
D. Equipment $4,000
Accounts Payable $2,725
Cash $1,275"

Answer 1

The correct accounting entry for Prairie Clinic's X-ray equipment purchase is to debit Equipment for $4,000, and credit Cash for $1,275 and Accounts Payable for $2,725.Hence, option C is the correct answer.

Step-by-step explanation:

The correct entry for Prairie Clinic's purchase of X-ray equipment with part of the payment made in cash and the remainder to be paid later is: Debit Equipment $4,000, Credit Accounts Payable $2,725, and Credit Cash $1,275. This entry reflects the acquisition of a new asset, the part of the payment made in cash, and the amount that has yet to be paid (an obligation) recorded as accounts payable.