Question

Onslow Co. purchased a used machine for $192,000 cash on January 2. On January 3, Onslow paid $6,000 to wire electricity to the machine and an additional $1,200 to secure it in place. The machine will be used for six years and have a $23,040 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.

Please answer in the format below!

Record the first year year-end adjusting entry for the depreciation expense of the used machine. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal < Prev 627 of 10 Next >

Answer 1

Answer:

Working Note Computation of Machinery Capitalization vaue
	Amount($)
Purchase Cost	1,92,000
Wire Electricity Paid	6,000
Expense incurred for additional secure	1,200
Total Capitalied Value of Machine	1,99,200
Working Note : Computation of Accumulated Dep on Machiney
Depreciation = (Cost of Machinery - Salvage Value )/ Usefull Life
Depreciation = ((199,200-23040)/6= $29,360
Accumulated Depreciation= Annual Dep X No. of year Machine Used
Accumulated Depreciation:- $29,360 X 5= $146,800

Journal Entry- First Year Depreciation
Date	Accounts titles and Explanation	Debit ($)	Credit ($)
31-Dec	Depreciation Expense	29,360
	Accumulated depreciation - machine		29,360
Journal Entry- Depreciaiton expense for disposal year
Date	Accounts titles and Explanation	Debit ($)	Credit ($)
31-Dec	Depreciation Expense	29,360
	Accumulated depreciation - machine		29,360