Reference no: EM132777125

Hennigan Company

Use the five transactions below for Hennigan Rentals to answer the questions that follow.

Dec. 1

• Hennigan purchases two new saws on credit at $375 each. The saws are added to Hennigan's rental inventory. Payment is due in 30 days.
• 8 Hennigan accepts advance deposits for tool rentals of $75.
• 15 Hennigan receives a bill from Farmer's Electric Company for $150. Payment is due in 30 days.
• 20 Customers are charged $750 by Hennigan for tool rentals. Payment is due from the customers in 30 days.
• 31 Hennigan receives $500 in payments from the customers that were billed for rentals on December 20.

Refer to the transactions for Hennigan Rentals.

Problem 1: Based on the December 15 transaction, Farmer's Electric will record which of the following in its accounting records?

a. A debit in Accounts Receivable for $150

b. A debit in Accounts Payable for $150

c. A credit in Accounts Payable for $150

d. A credit in Accounts Receivable for $150