Question

Hand company purchased a machine for $30,000. He paid $18,000 cash and signed a note payable agreeing to pay the remaining $12,000 in the future which one of the following is included in the general entry necessary to record this purchase of a machine.

Answer 1

The necessary general entry to record the purchase of the machine is a debit to Machine for $30,000, a credit to Cash for $18,000, and a credit to Note Payable for $12,000.

Step-by-step explanation:

The general entry necessary to record the purchase of the machine is as follows:

Debit Machine (Asset) $30,000

Credit Cash (Asset) $18,000

Credit Note Payable (Liability) $12,000

This entry reflects the purchase of the machine for $30,000, with $18,000 paid in cash and $12,000 to be paid in the future through a note payable.