Question

NEED JOURNAL ENTRIES FOR EVENT 4 AND 5 AND MARKED IF THEY ARE A ASSET SOURCE, ASSET USE, ASSET EXCHANGE OR CLAIMS EXCHANGE

ACC 211 bought equipment for $6,000 on January 1st. The furniture had a 4% discount. Freight cost amounted to $1,600. ACC 211 had to hire a specialist to adjust the equipment before use. He paid the specialist $1,500. Insurance expense for the equipment was $500 annually. The equipment has a useful life of 10 years with salvage value of $500. The straight-line method was used as the method of depreciation. All of these expenses were paid in cash. Type AS/AE/AU/CE 5a. Record in general journal format the acquisition of the furniture 5a. Record in general journal format the depreciation expense for the first year using straight line 5b. 5c. Record in general journal format, any expenses not capitalized Type AS/AE/AU/CE 5c. General Ledger - 10 points

Answer 1

1. ACC A/c ..Dr. $6,000

To Cash A/c $5,640

To Discount Received A/c $360

2. Furniture A/c..Dr. $5,640

Freight A/c Dr. $1,600

Specialist fee A/C Dr. $1,500

Insurance fee A/c Dr. $500

To Cash A/c $9,240

3. Straight line Depreciation

(Assset Value - Salvage Value) / Useful life= Per year depreciation value

($9,240-$500)=$8,740/10= $874 (Per Year Depreciation