Final Answer:
The journal entry should include a debit to Equipment for $24,800, a credit to Cash for $6,200, and a credit to Notes Payable for the remaining amount.
Step-by-step explanation:
When purchasing equipment, a company needs to record the transaction in its accounting books. In this scenario, the total cost of the equipment is $24,800. Since $6,200 is paid in cash, the remaining amount, which is the difference between the total cost and the cash payment, is handled through a note payable.
The journal entry involves a debit to the Equipment account, representing the increase in the value of assets. The cash payment is recorded with a credit to the Cash account, reflecting the decrease in cash assets. The remaining amount, financed through a note payable, is recorded with a credit to the Notes Payable account, indicating a liability.
This accounting treatment ensures that the company accurately reflects the acquisition of equipment, the cash outflow, and the obligation created by signing a note payable in its financial records. The Equipment account on the balance sheet will show the total cost of the equipment, the Cash account will reflect the cash payment, and the Notes Payable account will represent the outstanding amount to be paid in the future.