Problem: Dr. Matt Donnelly operates a dental office outside of Mobile, Alabama. Recently he ordered a new dental chair for his patients since the older one was in poor condition. The Model 1880 by Dental Designs, Inc. sells for $12,680 (including tax) and shipping is $580 (including tax) FOB Destination.
Which of the following journal entries would Donnelly record if he wrote and mailed a check for the dental chair based on the invoice shipped with the chair on the day the chair was delivered?
Item Account(s) DEBIT CREDIT
A.) Merchandise Inventory $13,260
Cash $13,260
B. Office Equipment $12,680
Transportation In $580
Accounts Payable $13,260
C. Accounts Payable $13,260
Office Equipment $13,260
D. Office Equipment $12,680
Cash $12,680
Answer
1. Item D. is the correct journal entry.
2. Item C. is the correct journal entry.
3. Item B. is the correct journal entry.
4. Item A. is the correct journal entry.