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Mr. Chen lends P500,000 cash to the entity. At the same, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining amount of P400,000 in the bank account. The journal entry to record the transaction should be:   a. Debit: Cash....................P500,000 Cash in Bank....... 400,000 Credit: Accounts Payable - Mr. Chein........... P900,000 b. Debit: Accounts Payable………. P100,000 Cash in Bank……………… 400,000 Credit: Loans Payable-Mr. Chein……… P500,000 c. Debit: Cash…………………………… P100,000 Cash in Bank……………… 400,000 Credit: Loans Payable-Mr. Chein………. P500,000 d. Debit: Cash…………………………. P400,000 Accounts Payable…….. 100,000 Credit: Cash in Bank……………………….. P500,000

Mr. Chen lends P500,000 cash to the entity. At the same, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining amount of P400,000 in the bank account. The journal entry to record the transaction should be:   a. Debit: Cash....................P500,000 Cash in Bank....... 400,000 Credit: Accounts Payable - Mr. Chein........... P900,000 b. Debit: Accounts Payable………. P100,000 Cash in Bank……………… 400,000 Credit: Loans Payable-Mr. Chein……… P500,000 c. Debit: Cash…………………………… P100,000 Cash in Bank……………… 400,000 Credit: Loans Payable-Mr. Chein………. P500,000 d. Debit: Cash…………………………. P400,000 Accounts Payable…….. 100,000 Credit: Cash in Bank……………………….. P500,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Mr. Chen lends P500,000 cash to the entity. At the same, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining amount of P400,000 in the bank account. The journal entry to record the transaction should be:

 


a.
Debit:
Cash....................P500,000
Cash in Bank....... 400,000

Credit:
Accounts Payable - Mr. Chein........... P900,000

b.
Debit:
Accounts Payable………. P100,000
Cash in Bank……………… 400,000

Credit:
Loans Payable-Mr. Chein……… P500,000

c.
Debit:
Cash…………………………… P100,000
Cash in Bank……………… 400,000

Credit:
Loans Payable-Mr. Chein………. P500,000

d.
Debit:
Cash…………………………. P400,000
Accounts Payable…….. 100,000

Credit:
Cash in Bank……………………….. P500,000

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