You, the owner of XYZ Day Care, buy a new van for your business. The van costs $20,000, all of which you borrow from First American Bank. Which of the following correctly describes the journal entry for this transaction?

Question

A. $20,000 debit to Vehicles, $20,000 credit to Accounts Payable
B. $20,000 debit to Vehicles, $20,000 credit to Notes Payable
C. $10,000 debit to Vehicles, $10,000 credit to Notes Payable
D. $20,000 debit to Vehicles, $20,000 credit to Owner's Equity

D.