Transaction 8 On March 1, fixtures and equipment were purchased for $6,000 with

Question

Transaction 8

On March 1, fixtures and equipment were purchased for $6,000 with a downpayment of $1,500 plus a $4,500 note payable in one year. Interest of 7% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 10 years with no expected salvage value. Depreciation on the fixtures and equipment is computed on a straight-line basis. [Note: Record the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:

Account:             Dollar amount:   

For account parts, you should choose from options below:

Cash,
Accounts Receivable,
Inventory,
Prepaid Rent,
Fixtures and equipments,
Accounts Payable,
Interest Payable,
Wages Payable,
Notes Payable,
Paid-in Capital,
Retained Earnings,
Leave Bank

Explanation / Answer

Account: Cash   Dollar amount: -1500

Account: Fixtures and equipments            Dollar amount: 6000

Account: Notes Payable            Dollar amount: 4500

Account: Fixtures and equipments Dollar amount: -30

Account:   Retained Earnings         Dollar amount: -30

Account: Interest Payable          Dollar amount: 17

Account: Retained Earnings   Dollar amount: -17

Account:  Leave Blank          Dollar amount:   

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