[Q1] The entity purchased merchandise and paid $30,000 in cash.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Merchandise | 30,000 | |
| Cash | 30,000 |
[Notes]
Debit: Increase in merchandise
Credit: Decrease in cash
[Q2] The entity purchased $30,000 merchandise on account.
Prepare a journal entry to record this transaction.
[Journal Entry]
| Debit | Credit | |
| Merchandise | 30,000 | |
| Accounts payable | 30,000 |
[Notes]
Debit: Increase in merchandise
Credit: Increase in accounts payable
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