Question

Record Journal entries and all adjusting entries.

a. Purchased new equipment for $50,000 by paying cash on Oct 1. This equipment will have an 8 year useful life, an estimated residual value of 8,000.

b. Purchased $4,000 of equipment on July1, paying $500 in cash and owing the rest on accounts payable to the supplier. The equipment will be depreciated using the double declining balance method have a useful life of 4 years. It is estimated to have a 500 residual value.

c. On Sept 1 paid the supplier of equipment purchased on July 1 the remaining balance.

Answer 1

Journal entry

No	General Journal	Debit	Credit
1	Equipment	50000
	Cash		50000
	Depreciation expense (50000-8000/8)*3/12	1312.50
	Accumulated depreciation-equipment		1312.50
2	Equipment	4000
	Cash		500
	Account payable		3500
	Depreciation expense (4000*50%*6/12)	1000
	Accumulated depreciation-equipment		1000
3	Account payable	3500
	Cash		3500