Questions: Fill in the Blank Question Holt Computer Services purchased 2,000 of new equipment and paid immediately. Illustrate how to record the transaction into T-accounts of Holt Services by completing the following sentence. The Equipment account would be (debited/credited) on the (left/right) side of the T-account and the Cash account would be (debited/credited) on the (left/right) side of the T-account.

To record the transaction of Holt Computer Services purchasing $2,000 of new equipment and paying immediately, we need to understand the basic principles of double-entry bookkeeping. In this system, every transaction affects at least two accounts, and the total debits must equal the total credits.

1. Equipment Account: When Holt Computer Services purchases new equipment, the Equipment account increases. In accounting, an increase in an asset account is recorded as a debit. Therefore, the Equipment account would be debited on the left side of the T-account.

2. Cash Account: Since the company paid for the equipment immediately, the Cash account decreases. In accounting, a decrease in an asset account is recorded as a credit. Therefore, the Cash account would be credited on the right side of the T-account.

So, the completed sentence would be:

The Equipment account would be debited on the left side of the T-account and the Cash account would be credited on the right side of the T-account.

• Equipment Account (Asset):
  • Debit (left side) increases the account.
  • Credit (right side) decreases the account.
• Cash Account (Asset):
  • Debit (left side) increases the account.
  • Credit (right side) decreases the account.

Equipment Account
-----------------
| Debit | Credit |
|-------|--------|
| 2000  |        |

Cash Account
-----------------
| Debit | Credit |
|-------|--------|
|       | 2000   |

This representation shows that the Equipment account is debited (increased) by $2,000, and the Cash account is credited (decreased) by $2,000, reflecting the immediate payment for the new equipment.