John Hay In: Category - Journal EntriesWhat is the journal entry for purchase of machinery?journal entrymachineryPurchase of machinery ShareFacebook1 AnswerVotedRecent Palak 2020-08-27T23:21:53+05:30Added an answer on August 27, 2020 at 11:21 pm This answer was edited. A customer can purchase on two basis: cash or credit. In case of a cash purchase, the payment is made immediately by the customer however, in case of a credit purchase, the payment is expected to be made in the future as per the agreement.Journal entry for purchase of machinery on credit basis:Machinery a/cDebitDebit the increase in assetTo Creditor/suppliers a/cCreditCredit the increase in liability(being machinery purchased on credit)Journal entry for purchase of machinery for cash:Machinery a/cDebitDebit the increase in assetTo CashCreditCredit the decrease in asset(being machinery purchased for cash)Example1. Mr. K purchased machinery from ABC Ltd. amounting to 20,000 on credit. The journal entry in the books of Mr. K is as follows:Machinery a/cDebit20,000To ABC Ltd. a/cCredit20,000(being machinery purchased on credit)2. Mr. A purchased machinery from XYZ Ltd. amounting to 20,000 on a cash basis. The journal entry in the books of Mr. A is as follows:Machinery a/cDebit40,000To CashCredit40,000(being machinery purchased for cash)Hope this helps.0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login to add an answer. Username or email* Password* Captcha* Click on image to update the captcha. Remember Me! Forgot Password?