Per company policy, tools with a purchase price greater than $1,000 are capitalized

Discipline: Accounting

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 1 Words: 275

Question

Per company policy, tools with a purchase price greater than $1,000 are capitalized. What's the correct entry to record a tool purchase of $500?

A) Debit fixed assets $1000, Credit cash $1,000

B) Debt fixed asset $500, Credit tools expense $500

C) Debt fixed asset $500, Credit cash $500

D) Debt tools expense $1,000, Credit cash $1,000

E) Debt tools expense $500, Credit cash $500