Question

1)

A machine costing $67,708 with a 7-year life and $64,149 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation. Round your answer to the nearest whole dollar.

$__________ per year

2)

Computer equipment was acquired at the beginning of the year at a cost of $54,500 that has an estimated residual value of $4,600 and an estimated useful life of 5 years.

a. Determine the depreciable cost.
$

b. Determine the straight-line rate.
%

c. Determine the annual straight-line depreciation.
$

3)

On the first day of the fiscal year, a company issues an $886,000, 7%, 5-year bond that pays semiannual interest of $31,010 ($886,000 x 7% x 1/2), receiving cash of $832,800. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method.

If an amount box does not require an entry, leave it blank.

Answer 1

Answer → 1) Compute the yearly depreciation expense using straight line depreciation": $ 9160 per year Using Machine cost = $ 67708 life = 7 years depreciable cost = $64149 We know, Debreciable cost = (cost of Asset - Estimated Residual value $64149 = $67708 - residual value Residual value = $67708-$64149 = $3559

- cost - residual value Depreciation Expense using straight line depreciation useful life in years $ 67708 - $3559 7 years = $9160 per year