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    JSamuels's Avatar
    JSamuels Posts: 4, Reputation: 1
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    #1

    Apr 22, 2010, 05:58 PM
    If I bought two new saws on credit at $375 each on October 1, what would be the journ
    If I bought two new saws on credit at $375 each on Wctober 1, what would be the journal entry to record on October 1.

    I think it is:
    $750 debit, Cash; 750 credit, Tool Rental Expense.
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Apr 22, 2010, 06:39 PM

    You are actually buying an asset
    And it is not with cash but with credit.
    When you buy an asset , it is always DEBIT the asset account.
    If you do not use Cash, then cash does not come into it.
    You used credit so there must be a name of the supplier of this credit.
    CREDIT the supplier name account.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #3

    Apr 23, 2010, 01:01 PM

    What are the saws for?
    Resale or for use in the business.

    If for resale the entry will be:
    Debit Inventory
    Credit Accounts Payable

    If for use in the business:
    Debit PP&E
    Credit Accounts Payable
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