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Question on Accounting?


I had a test question today and i wasn't sure about it's answer.
The question was as follows:

Mr. X invested opened up a haircutting business and invested $10,000 cash and $30,000 worth of equipment. Although $10,000 of the equipment was purchased on credit. What will be the initial entry ?

It was a multiple choice question, i only remember 2 of the answers :

a) Dr Cash $10,000
Dr Equipment $30,000
Cr Capital $40,000

b) Dr Cash $10,000
Dr Equipment $30,000
Cr Accounts Payable $10,000
Cr Capital $30,000

I chose b , coz i thought if $10,000 of equipment was bought on credit then it won't be recognized as capital until it's paid off.... but i'm not sure though if that's right. There were 2 other choices but i don't remember them. So if anyone knows what the entries should've been please let me know. Thnx!

yup, it's reasonable, you're right

You are correct.

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