p10-5 consider each of the transactions below.all of the expenditurs werre made

Question

p10-5

consider each of the transactions below.all of the expenditurs werre made in cash

1. the edison company spent 12,000 during the yearfor te xperimental purposes in connection with the devolopment of a new product

2. in april the marshall company lost a patient infringment suit and paid the plaintiff 7,500

3. in march the clenway landromat bough equipment clleanway paid 6000 down and signed a noninterest bearing note requiring the payment of 18,000 in 9 months the cash price for the equipment was 23,000

4. on june 1 the jamson corp installed a sprnkler system throughout the building at a cost of 28,000

5. the mayer comp plaitiff paid 12,000 legal fees i november in connenction with a successful infringment suit on its patent.

6. the johnson company traded its old machine with an origonal cost of 7400 and a book value of 3,000 plus cash of 8,000 for a new one that had a fair value of 10,000 the exchange has a commercal substance

required

prepare journal entrys to record each of the above transactions

Explanation / Answer

1) Research and development expense Dr 12000                Cash Cr 12000 2) Legal fees Dr 7500               Cash Cr 7500 3) equipment Dr 23000 Interest expense Dr 1000                   Cash Cr 6000                   Notes payable Cr 18000 4) equipment Dr 28000             Cash Cr 28000 5) Legal fees Dr 12000               Cash Cr 12000 6) equipment Dr 10000 Accumulated depriciation Dr 4400 Loss on sale of equipment Dr 1000             Equipment Cr 7400             CaSH 8000

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