During January 2016, Wells Corporation purchased $200,000 of inventory; they paid one-fourth in cash, and signed a note for the remaining balance. This transaction will be recorded as:

Inventory $200,000

Cash $50,000

Notes payable $150,000

Explanation:

Data provided in the question:

Cost of the inventory purchased = $200,000

Amount paid in cash = one-fourth

= one-fourth of $200,000

= $50,000

For the remaining balance signed a note i. e = $200,000 - $50,000

= $150,000

Now,

This transaction will be recorded as:

Inventory $200,000

Cash $50,000

Notes payable $150,000