Journal entry to record the purchase of equipment



[Q1] The entity purchased new equipment and paid $150,000 in cash.
Prepare a journal entry to record this transaction.

[Journal Entry]

  Debit Credit
Equipment 150,000  
     Cash   150,000

[Notes]
Debit: Increase in equipment
Credit: Decrease in cash

[Q2] The entity purchased $150,000 new equipment on account.
Prepare a journal entry to record this transaction.

[Journal Entry]

  Debit Credit
Equipment 150,000  
     Accounts payable   150,000

[Notes]
Debit: Increase in equipment
Credit: Increase in accounts payable

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