Question

Vita Water purchased a used machine for $117,500 on January 2, 2020. It was repaired the next day at a cost of $5,250 and installed on a new platform that cost $1,650. The company predicted that the machine would be used for six years and would then have a $14,720 residual value. Depreciation was to be charged on a straight-line basis to the nearest whole month. A full year's depreciation was recorded on December 31, 2020. On September 30, 2025, it was retired. Required: 1. Prepare journal entries to record the purchase of the machine, the cost of repairing it, and the installation. Assume that cash was pald. View transaction list Journal entry worksheet < 1 2 3 Record purchase of machine. Note: Enter debits before credits. General Journal Debit Credit Date Jan 02, 2020 Record entry Clear entry View general journal

Answer 1

Credit Date General Journal 02-02-20 Machinery Debit $117.500 Cash $117,500 $ 5,250 03-02-20 Machinery Cash $ 5.250 Calculation of Accumulated Depreciation $ 1,650 03-02-20 Machinery Cash $ 1.650 Cost of Machine Salvage Value Depreciation $ 124,400 14720 18280 (124400-14720)/6 | 31-12-20 Depreciation Machinery Ex $ 18,280 Accumulated Depreciation $ 18,280 30-09-25 Cash $ 18,000 Accumulated Depreciation | $ 91,400 Loss on sale of machinery $ 15,000 Machinery Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Accumulated Depreciation 18280 18280 18280 18280 18280 91400 $124.400 30-09-25 Cash $ 22,000 Accumulated Depreciation $ 91,400 Loss on sale of machinery $ 11,000 Machinery $124.400 30-09-25 Cash $ 20,000 Accumulated Depreciation | $ 91,400 Loss on sale of machinery $ 13,000 Machinery $124,400