A business buys office equipment by issuing a one-year note payable. How is this recorded?
- A Debit asset, credit equity
- B Debit liability, credit asset
- C Debit asset, credit liability
- D Debit equity, credit asset
Answer
Debit asset, credit liability
The equipment increases assets (debit) and the note payable increases liabilities (credit). No cash and no equity is involved at the point of purchase.





