Slug, Inc. purchases equipment for $1,200,000 million paying $180,000 in cash and issuing $1,020,000 in promissory notes. When the journal entry is posted to the related accounts:
A. $1,200,000 will be credited to asset accounts; $1,200,000 will be debited to liability accounts.
B. $1,200,000 will be debited and $180,000 will be credited to asset accounts; $1,020,000 will be credited to liability accounts.
C. $1,200,000 will be credited and $180,000 will be debited to asset accounts; $1,020,000 will be debited to liability accounts.
D. $1,200,000 will be debited to asset accounts; $1,020,000 will be credited to liability accounts.
Answer: B
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