Prepare journal entries to record the following transactions of a company during
ID: 2597425 • Letter: P
Question
Prepare journal entries to record the following transactions of a company during the current year 4 Mar i Purchased a truck for $40,000 with a 5-year useful life and a ss,000 salvage value. Also paid 6% sales tax, $350 for the annual tru with the company's colors and name, and $1,500 for maintenance supplies for the ck license, $300 to paint the truck future. All payments were in cash. Mar 10 Purch ased a garage from a neighboring business with a 796, 4-year, $67,000 note. The seller's book value for the garage was $42,750. The estimated remaining useful life of the garage is 10 years. July 5 Paid $800 cash to replace (uninsured) garage windows broken during a storm. Aug 25 Purchased used shop equipment for $10,700 cash. Sales tax was $825, freight costs $250, $3,200 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 $11,500 cash. Paid $1,290 in sales tax, $550 for repairs incurred from damage during installation, and $2,200 for supplies to be used for periodic preventive maintenance. The estimated useful life of the equipment is 8 years and salvage value is $1,200. Answer:Explanation / Answer
Mar 1
Truck A/c Dr 43,050
Supplies for Truck Dr 1,500
To Cash a/c 44,550
(Being truck and supplies of $1500 purchased expenses on truck capitalised.)
Mar 10
Garage A/c Dr 51,114
Interest Suspense A/c Dr 15,886
To Notes Payable A/c 67,000
(Being Garage purchased by issuing Note @7% for 4 years)
July 5
Repairs of Garage A/c Dr 800
To Cash A/c 800
(Being Garage repaired)
Aug 25
Shop Equipment A/c Dr 15,875
To Cash A/c 15,875
(Being shop equipment purchased and cost of setting up capitalised)
Oct 5
Office Equipment Dr 13,340
Supplies for Office Equipment Dr 2,200
To Cash A/c 15,540
(Being Office equipment purchased and cost of setting up capitalised.
Supplies bought for future maintenance)