Question

Required information The following information applies to the questions displayed below] Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $13,200. They expect to use the Suburban for five years and then sell the vehicle for $5,100. The following expenditures related to the vehicle were also made on July 1, 2022 The company pays $2,100 to GEIC0 for a one-year insurance policy The company spends an extra $4,200 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides. An additional $2,300 is spent on a deluxe roof rack and a trailer hitch The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $1,000 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter quired: Record the expenditures related to the vehicle on July 1, 2022. Note: The capitalized cost of the vehicle is recorded in the uipment account. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field )

Answer 1

Cost of Equipment = $13200 + $4200 + $2300 = $19700

Date	Account titles	Debit	Credit
Jul-01	Equipment	$           19,700
	Cash		$            19,700
	(Purchase of equipment and other improvements)
Jul-01	Prepaid Insurance	$             2,100
	Cash		$              2,100
	(Cash paid for insurance to cover 12 months)
Oct-22	Repair and Maintenance expense	$             1,000
	Cash		$              1,000
	(Cash paid for general maintenance