The journal entry to account for the acquisition on credit of factory machinery from Millet plc should require which of the following:

Debit Factory account and credit Millet plc account

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Debit Machinery account and credit Millet plc account

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Debit Millet plc account and credit Machinery account

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Debit Machinery account and credit Cash account

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Solution

The correct option is B Debit Machinery account and credit Millet plc account
Machinery is purchase so there is an increase in machinery therefore it will be debited and creditor will also increase so it will be credited.

Suggest Corrections

Similar questions

Rectify the following errors:

(a)	Furniture purchased for Rs 10,000 wrongly debited to purchases account.
(b)	Machinery purchased on credit from Raman for Rs 20,000 was recorded through purchases book.
(c)	Repairs on machinery Rs 1,400 debited to machinery account.
(d)	Repairs on overhauling of secondhand machinery purchased Rs 2,000 was debited to Repairs account.
(e)	Sale of old machinery at book value of Rs 3,000 was credited to sales account.

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