Problem 9-5A (Part Level Submission) (a) Date Account Titles and Explanation Deb

Question

Problem 9-5A (Part Level Submission)

(a)

Date

Account Titles and Explanation

Debit

Credit

(To record depreciation)

May 1

(To record sale of equipment)

(To record depreciation)

(To record retirement of equipment)

Problem 9-5A (Part Level Submission)

At December 31, 2017, Grand Company reported the following as plant assets.
Land $ 4,320,000 Buildings $29,800,000 Less: Accumulated depreciation—buildings 10,570,000 19,230,000 Equipment 47,520,000 Less: Accumulated depreciation—equipment 4,910,000 42,610,000     Total plant assets $66,160,000
During 2018, the following selected cash transactions occurred.
April 1 Purchased land for $2,000,000. May 1 Sold equipment that cost $840,000 when purchased on January 1, 2014. The equipment was sold for $504,000. June 1 Sold land purchased on June 1, 2008 for $1,430,000. The land cost $393,000. July 1 Purchased equipment for $2,440,000. Dec. 31 Retired equipment that cost $480,000 when purchased on December 31, 2008. The company received no proceeds related to salvage.

(a)

Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

Apr. 1May 1June 1July 1Dec. 31

Apr. 1May 1June 1July 1Dec. 31

(To record depreciation)

May 1

(To record sale of equipment)

Apr. 1May 1June 1July 1Dec. 31

Apr. 1May 1June 1July 1Dec. 31

Apr. 1May 1June 1July 1Dec. 31

(To record depreciation)

Apr. 1May 1June 1July 1Dec. 31

(To record retirement of equipment)

ter 09: e 9-9

Explanation / Answer

Grand Company Journal entries for the year 2018 Date Account Title Debit Credit April.1 Land 2000000 Cash 2000000 (Purchase of land ) May.1 Depreciation Expense 28000 Accumulated Depreciation - Equipment 28000 (Depreciation expense on the equipment sold) May.1 Cash 504000 Accumulated Depreciation - Equipment 364000 Equipment 840000 Gain on sale of equipment 48000 (Sale of equipment purchased in 2014 ) June.1 Cash 1430000 Land 393000 Gain on sale of land 1037000 (Sale of land costing ) July.1 Equipment 2440000 Cash 2440000 (Purchase of equipment) Dec.31 Equipment 480000 Accumulated Depreciation - Equipment 480000 (Retirement of equipment after 10 years) Dec.31 Depreciation Expense 5386000 Accumulated Depreciation - Equipment 4790000 Accumulated Depreciation - Building 596000 (Depreciation expense for the year recorded)

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