Oaktree Company purchased new equipment and made the following expenditures: Pur

Question

Oaktree Company purchased new equipment and made the following expenditures: Purchase price $ 54,000 Sales tax 3,100 Freight charges for shipment of equipment 790 Insurance on the equipment for the first year 990 Installation of equipment 1,900 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.)

Explanation / Answer

1 Equipment 59790 =54000+3100+790+1900       Accounts payable 57100 =54000+3100        Cash 2690 2 Prepaid insurance 990        Cash 990

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