prepare journal entries to record the following transactions of a company during
ID: 2594451 • Letter: P
Question
prepare journal entries to record the following transactions of a company during the current year:
Mar 1 purchased a truck for 40000 with a 5-year useful life and a 5000 salvage value. Also paid 6% sales tax, 350 for the annual truck license 300 to paint the truck with the company's colors and name, 1500 for maintenance supplies for the future. all payments were in cash
Mar 10 purchased a garage from a neighboring business with a 7% 4 year, 67000 note. the seller's book value for the garage was 42750. the estimated remaining useful life of the garage is 10 years
July 5paid 800 cash to replace (uninsured) garage windows broken during a storm
Aug 25 purchased used shop equipment for 10700 cash. sales tax was 825, freight costs 250, 3200 for a special base to house the equipment, and reconditioning costs 900, all of which were paid in cash. the estimated useful life of the equipment is 3 years and salvage value is 500.
oct 5 purchased office equipment for 11500 cash. paid 1290 in sales tax, 550 for repairs incurred from damage during installation, and 2200 for supplies to be used for periodic preventive maintenance. The estimated useful life of the equipment is 8 years and salvage value is 1200
Explanation / Answer
Journal Entries would be:
March 1. Truck A/c Dr. $ 44550
( Value of truck + sales tax + Licence fees + paint fees + maintenance fees)
To Cash a/c $ 44550
March 10. Garage a/c Dr. $ 42750
Discount on note payable Dr. $ 24250
To 7%, 4 years Note payable $ 67000
March 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
March 31. Depreciation Expense (Garage) Dr. $ 245.96
To Accumulated Depreciation $ 245.96
April 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
April 30. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
May 31 Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
May 31. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
June 30. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
June 30. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
July 5. Replacement Dr. $ 800
To Cash $ 800
July 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
July 31. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Aug 25. Equipment a/c Dr. $ 15875
To Cash a/c $ 15875
Aug 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
Aug 31. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Aug 31. Depreciation Expense (Equipment) Dr. $ 56
To Accumulated Depreciation $ 56
Sep 30. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
Sep 30. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Sep 30. Depreciation Expense (Equipment) Dr. $ 283
To Accumulated Depreciation $ 283
Oct 5. Office Equipment Dr. $ 15540
To Cash $ 15540
Oct 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
Oct 31. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Oct 31. Depreciation Expense (Equipment) Dr. $ 283
To Accumulated Depreciation $ 283
Oct 31. Depreciation Expense (Office Equipment) Dr. $ 92
To Accumulated Depreciation $ 92
Nov 30. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
Nov 30. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Nov 30. Depreciation Expense (Equipment) Dr. $ 283
To Accumulated Depreciation $ 283
Nov 30. Depreciation Expense (Office Equipment) Dr. $ 107
To Accumulated Depreciation $ 107
Dec 31. Depreciation Expense (Truck) Dr. $ 583.33
To Accumulated Depreciation $ 583.33
Dec 31. Depreciation Expense (Garage) Dr. $ 356
To Accumulated Depreciation $ 356
Dec 31. Depreciation Expense (Equipment) Dr. $ 283
To Accumulated Depreciation $ 283
Dec 31. Depreciation Expense (Office Equipment) Dr. $ 107
To Accumulated Depreciation $ 107
Dec 31. Interest Expense Dr. $ 4690
To Interest Payable (Current Year) $ 4690
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