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Purchased furniture for $12500 from Fantastic Australia, payable in 30 days. The journal entry to record the transaction is:
a. debit, furniture $12500 and credit, cash $12500.
b. debit, furniture $12500 and credit, accounts payable $12500.
c. debit, furniture $12500 and credit, expenses $12500.
d. debit, cash $12500 and credit, furniture $12500.
The correct journal entry to record the purchase of furniture on credit is:
b. debit, furniture 12500.
This entry reflects the acquisition of an asset (furniture) and the corresponding liability (accounts payable) due within 30 days.
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