Oaktree Company purchased new equipment and made the following expenditures Purc

Question

Oaktree Company purchased new equipment and made the following expenditures Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment $59,000 3,600 840 1,040 2,400 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of equipment. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal

Explanation / Answer

total cost of Equipment $ purchase price 59,000 Sales tax 3,600 Freight charges 840 installation of Equipment 2,400 total cost of Equipment 65,840 Event General journal Debit Credit 1) Equipment 65,840 cash (840+2400) 3,240 Accounts payable 62,600 2) prepaid insurance 1,040 cash 1,040

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