paid $8,000 for a truck and paid $2,000 on account. How would this be journalized and in what accoun

Accounting
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Paid $8,000 for a truck and paid $2,000 on account. How is this noted in a journal and in which account?

Apr 25th, 2015

Debit: truck/equipment 8,000

Credit: accounts payable 2,000

Credit: cash   6,000

The truck is added to its on account, or more normally, to equipment. It will be depreciated throughout its useful life.

When 2,000 is on account, this is in essence a short term loan; the rest, if not on account (or exchange of goods) is in cash.

There is a 6,000 investing outflow for cash. 

Apr 25th, 2015

Thank You Kelsey this is what I thought. I appreciate your time and answer

Apr 25th, 2015

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