Problem 18-5 (LO 10) Journal entries. Super Senior Agency is a VHWO events occur
ID: 2521755 • Letter: P
Question
Problem 18-5 (LO 10) Journal entries. Super Senior Agency is a VHWO events occurred during the year. The agency uses one control account for its fixed assets, with supporting subsidiary records 1. Property was purchased for $200,000. A down payment of $40,000 was made from unrest- ·The following ricted cash, and a 14% mortgage was signed for the remainder. 2. Office furniture was purchased for $9,000 on open account. 3. A local corporation donated and installed room partitions. The value of the donated items 4. At year-end, a payment was made covering mortgage interest for one year, plus a $10,000 5. Office equipment costing $3,000, with a book value of $1,000, was sold for $1,800 cash. 6. Fully depreciated equipment costing $7,000 was written off. There was no scrap value. and services was $14,000. Super Senior's policy is to release donor restrictions over the useful life of the assets to match depreciation expense. payment on the principal. The gain is unrestricted. A depreciation schedule was prepared, showing annual depreciation expense of $46,000, which was recorded. Depreciation of $20,000 was for equipment donated or purchased with donated cash. 8. Two years ago, the will of an agency volunteer granted $75,000 for the acquisition and installation of theater equipment, providing the organization acquired a new building. The ount now was expended in accordance with the stipulations of the will, and payment of $75,000 was made. 9. The account payable of $9,000 mentioned in item (2) was paid. Prepare journal entries to record the preceding eventsExplanation / Answer
Account Debit Credit 1 Property Asset Dr 2,00,000 Cash Cr 40,000 14% Mortgage Loan Cr 1,60,000 2 Office Furniture Asset Dr 9,000 Accounts Payable Cr 9,000 (On Account Purchases are to be credited to Accounts Payable) 3 Property Asset Dr 14,000 Grants Received Cr 14,000 (Grants Received is a revenue account) 4 Interest Expense Dr 22,400 Interest Payable Cr 22,400 5 Interest Payable Dr 22,400 14% Mortgage Loan Dr 10,000 Cash Cr 32,400 6 Since the Company maintains 1 single control account. There is no need to adjust for fully depreciated assets as the Value in the books for these assets is already 0. 7 Depreciation Expenses Dr 46,000 Property Asset Cr 46,000 8 Theatre Equipment Dr 75,000 Deferred Donation Cr 75,000 9 Accounts Payable Dr 9,000 Cash Cr 9,000