Question

Instructions Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $35, 136. The carpet is estimated to have a 16-year useful life and no residual value. A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

JOURNAL	ACCOUNTING EQUATION
	DATE	DESCRIPTION	POST REF	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	April 30	Carpet	123	$       35,136		$   35,136
2	April 30	Cash	110		$       35,136	$ -35,136
	Dec 31	Depreciation Expense - Carpet	522	$         1,464				$ -1,464
	Dec 31	Accumulated Depreciation - Carpet	124		$         1,464	$   -1,464

Depreciation = (Total Cost - Residual value) / Useful Life = (35136 - 0) / 16 = $ 2,196

Partial depreciation = 2,196 X 8 / 12 = 1,464