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Concord Company purchases equipment for $2770 and supplies for $400 from Ivanhoe Co. for $3170 cash.
The entry for this transaction will include:

A. credit to Cash for Ivanhoe.
B. credit to Accounts Payable for Concord.
C. debit to Equipment $2770 and a debit to Supplies $400 for Concord.
D. debit to Equipment $2770 and a debit to Supplies Expense $400 for Ivanhoe.

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Answer:

C. debit to Equipment $2770 and a debit to Supplies $400 for Concord.

Explanation:

Concord company purchased the Equipment and supplies for cash from Ivanhoe Co. As the Fixed asset and inventory purchased for cash the fixed asset and inventory will be debited and cash will be credited for Concord.

In Concord Account the Journal entry will be as follow

Dr.    Equipment $2,770

Dr.    Supplies     $400

Cr.    Cash           $3,170

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