**Journal Entry Preparation****Scenario:**On April 4th, a truck was purchased for a total cost of $73,040. Out of this, $4,200 was paid in cash immediately, and the remaining balance was put on account (i.e., accounts payable).**Instructions:**Prepare a journal entry for this transaction. If a particular amount box does not need an entry, leave it blank.**Transaction Date:**April 4th**Journal Entry:**| Date | Account Titles and Explanation | Debit ($) | Credit ($) ||----------|--------------------------------|-----------|------------|| April 4 | Truck | 73,040 | || April 4 | Cash | | 4,200 || April 4 | Accounts Payable | | 68,840 |**Explanation:**1. **Debiting the Truck Account:** - The total cost of the truck ($73,040) is debited to the Truck account, reflecting the acquisition of a new asset.2. **Crediting the Cash Account:** - The amount paid in cash ($4,200) is credited to the Cash account, indicating the outflow of cash.3. **Crediting the Accounts Payable:** - The remaining balance ($68,840) is credited to Accounts Payable, indicating the amount owed to the vendor.Note: The amounts in the debit and credit columns should always balance out (i.e., total debits should equal total credits) to maintain the accounting equation.

There are three golden rules in accounting for recording the transaction : Debit what comes in ,…

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Prepare a journal entry for the purchase of a truck on April 4 for $73,040, paying $4,200 cash and the remainder on account. If an amount box does not require an entry, leave it blank. April 4

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter5: Accounting Systems

Section: Chapter Questions

Problem 16E: The cash payments and purchases journals for Outdoor Artisan Landscaping follow. The accounts...

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

**Journal Entry Preparation**

**Scenario:**
On April 4th, a truck was purchased for a total cost of $73,040. Out of this, $4,200 was paid in cash immediately, and the remaining balance was put on account (i.e., accounts payable).

**Instructions:**
Prepare a journal entry for this transaction. If a particular amount box does not need an entry, leave it blank.

**Transaction Date:**
April 4th

**Journal Entry:**

| Date | Account Titles and Explanation | Debit ($) | Credit ($) |
|----------|--------------------------------|-----------|------------|
| April 4 | Truck | 73,040 | |
| April 4 | Cash | | 4,200 |
| April 4 | Accounts Payable | | 68,840 |

**Explanation:**

1. **Debiting the Truck Account:**
- The total cost of the truck ($73,040) is debited to the Truck account, reflecting the acquisition of a new asset.

2. **Crediting the Cash Account:**
- The amount paid in cash ($4,200) is credited to the Cash account, indicating the outflow of cash.

3. **Crediting the Accounts Payable:**
- The remaining balance ($68,840) is credited to Accounts Payable, indicating the amount owed to the vendor.

Note: The amounts in the debit and credit columns should always balance out (i.e., total debits should equal total credits) to maintain the accounting equation.

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