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Taylor Industries Account Payable; Discount; Entry

1. Taylor Industries purchased supplies for $1,000. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $500. Which of the following would be the correct way to complete the recording of the transaction?

Credit the Taylor, Capital account for $500.

Credit an asset account for $500.

Credit another liability account for $500.

Debit the Taylor, Capital account for $500.

2. The collection of a $900 account after the 2 percent discount period will result in a

debit to Cash for $900.

debit to Sales Discounts for $18.

debit to Cash for $882.

debit to Accounts Receivable for $900.

3. On June 1, 2010 Quang Le buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will

make a simple entry.

list the credit entries first, which is proper form for this type of transaction.

use two journal entries.

make a compound entry.

Solution Preview

Solutions of your three posted questions are provided in a separate word document and produced herewith also for your ready reference.

Question 1
The correct way to record the transaction is "Credit an asset account for $500." Complete journal entry would be recorded as under.

Supplies ...

Solution Summary

The solution discusses Taylor Industries account paybable, note with discount and copier machine entry.