Transaction 8 On March 1, fixtures and equipment were purchased for $4,000 with

Question

Transaction 8
On March 1, fixtures and equipment were purchased for $4,000 with a downpayment of $2,000 plus a $2,000 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.]

Options for Account portion:

Cash

Accounts Recievable

Inventory

Prepaid Rent

Fixtures and Equipment

Accounts Payable

Interest Payable

Wages Payable

Notes Payable

Paid-In Capital

Retained Earnings

Leave Blank

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Thank you for your help :)

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks.

Account: Cash Dollar Amount: -2000 Account: Fixtures and Equipment Dollar Amount: 4000 Account: Notes Payable Dollar Amount: 2000 Account: Fixtures and Equipment Dollar Amount: -33.33 Account: Retained Earnings Dollar Amount: -33.33 Account: Interest Payable Dollar Amount: 11.67 Account: Retained Earnings Dollar Amount: -11.67 Account: Leave Blank Dollar Amount:

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