In: Accounting
Use the following information to answer the next two questions:
Shindo Inc. purchased land owned by Buffet, Inc. for $375,000 by giving a 300-day, 16% note payable.
1. The journal entry would include a debit to which type of account?
A. Asset
B. Liability
C. Owners’ Equity
D. Revenue
E. Expense
Answer:
The Journal Entry would include a debit to Asset Account i.e. Land and land is an asset.
Hence, the correct option is A. Asset
2. The journal entry would include a credit to which type of account?
A. Asset
B. Liability
C. Owners’ Equity
D. Revenue
E. Expense
Credit would be Liability Account i.e. Notes Payable and Notes Payable is a Liability Account.
Hence the correct option is B. Liability
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Pls ask separate question for remaining parts