Which of the following journal entries correctly records the purchase of a delivery truck by Yoshi Company for \$25,000 cash?

• A. Debit Delivery Expense \$25,000; Credit Accounts Payable \$25,000
• B. Debit Accounts Payable \$25,000; Credit Delivery Trucks \$25,000
• C. Debit Cash \$25,000; Credit Delivery Trucks \$25,000
• D. Debit Delivery Trucks \$25,000; Credit Cash \$25,000

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the nature of the transaction. Yoshi Company is purchasing a delivery truck for \$25,000 cash. This is an asset acquisition, and the payment is made in cash, which reduces the cash account.
2. Step 2: Identify the accounts involved. The delivery truck is an asset, so it will be recorded in the 'Delivery Trucks' account. Cash is also an asset, but since it is being used to pay for the truck, it will decrease.
3. Step 3: Determine the type of accounts and their normal balances. 'Delivery Trucks' is an asset account, and assets increase with a debit. 'Cash' is also an asset account, but it decreases with a credit.
4. Step 4: Apply the double-entry accounting principle. For every transaction, debits must equal credits. In this case, debit the 'Delivery Trucks' account for \$25,000 to record the acquisition of the truck, and credit the 'Cash' account for \$25,000 to reflect the payment.
5. Step 5: Write the journal entry. The correct journal entry is: Debit Delivery Trucks \$25,000; Credit Cash \$25,000. This ensures the transaction is properly recorded in the company's books.