Required: Several transactions occurred in March. Each is described separately i

Question

Required: Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts that are affected, whether they increase or decrease, and the amount of the increase or decrease.

Please do not combine steps or accounts!

(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)

Transaction 8

On March 1, fixtures and equipment were purchased for $4,500 with a downpayment of $1,000 and a $3,500 note, payable in one year. Interest of 5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 12 years with no expected salvage value. [Note: Record the complete entry for 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.]

Explanation / Answer

Journal Entries to record the transactions Date Account Titles and Explanation Debit Credit March.1 Fixtures and Equipment $4,500 Cash $1,000 Notes Payable $3,500 (recording of purchase of Fixture and Equipment) March.31 Depreciation Expense {[$4500/12]/12} $31.25 Accumulated Depreciation - Fixture & Equipment $31.25 (recording of depreciation expense for 1 month) March.31 Interest Expense [$3500*5%/12] $14.58 Interest Payable $14.58 (recording of interest expense due for 1 month) Accounts Increase / Decrease Amount Cash Decrease 1000 Accounts Receivables Inventory Prepaid rent Fixture & equipment Increase 4500 Accounts Payable Interest Payable Increase 14.58 Wages Payable Notes Payable Increase 3500 Paid in capital Retained Earnings [$31.25+ $14.58] Decrease $45.83

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