Prepare Tony\'s Supply Co. general journal entries for the following Brando Comp

Question

Prepare Tony's Supply Co. general journal entries for the following Brando Company purchased a refrigerated delivery truck for $65.000 on April 1, 2016. The plan is to use the truck for 5 years and then replace it. At the end of its useful life truck is expected to have a salvage value of $10.000. Prepare the depreciation table for Brando's truck assuming that the company uses the straight-line method for depreciation. Prepare the depreciation table for Brando's truck assuming that the company uses the double-declining-balance depreciation method. Compute the depreciation expense for 2016 for Brando's truck assuming the truck has an expected life of 200.000 miles and during 2016 the truck was drive 24.540 miles. Round your depreciation expense per mile to three decimal place

Explanation / Answer

Solution:

Date Journal Debit Credit Jan-01 Notes Receivables              15,000.00 Accounts Receivables               15,000.00 Jan-15 Equipment              10,000.00 Notes payable               10,000.00 Jan-25 Notes Receivables              30,000.00 Cash               30,000.00 Jan-31 Accured interest ( 123.29 + 3.424)                    126.71 Interest Income                     126.71 Jan-31 Interest Expense 50.00 Interest outanding 50.00 Apr-25 Cash              30,739.73 Notes Receivables 30,000.00 Accured Interest 739.73 May-01 Cash 15,123.29 Notes Receivables 15,000.00 Accured Interest 123.29 Oct-15 Notes payable 10,000.00 Interest Expense 900.00 Cash 10,900.00

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