Question

Suppose that on January 1 Lambert Travel Company bad cash of $90,000 for equipment that is expected to remain set for five years. At the end of five years, the equipments value is expected to be 200 Read the rements 1. Make journal entries to record purchase of the equipment on January 1 and (b) anual depreciation on December 31. Include date and explanations, and use the following courts Equipment Accumulated Depreciation Equipment and Depreciation Equement ta Record the purchase of the prent. (Record debitstrst, then credits Select the explanation on the last line of the joumanyte) Journal Entry Accounts and Explanation Daba Credit Jon

Answer 1

1 Credit Debit 90,000 $ $ 90,000 Journal Entries Date Accounts and Explanation Jan-01 Equipment Cash (To record purchase of the equipment in cash.) Dec-31 Depreciation Expense - Equipment Accumulated Depreciation - Equipment To record annual depreciation on year end) ($90,000-0)/5 years = $18,000 $ 18,000 $ 18,000 2 Credit Balances as on December 31 Date Accounts Dec-31 Equipment Dec-31 Accumulated Depreciation - Equipment Debit 90,000 $ $ 18,000 3 Equipment Book Value = Equipment - Accumulated Depreciation $90,000 - $18,000 $ 72,000 Note: Please comment down for any further clarifications.