Question

For each separate case, record an adjusting entry (if necessary). 01:30 a. Barga Company purchases $33.000 of equipment on January 1. The equipment is expected to last five years and be worth $4.600 at the end of that time. b. Welch Company purchases $11,300 of land on January 1. The land is expected to last forever. Prepare the entries to record one year's depreciation expense of $5.680 for the equipment and what depreciation adjustment, if any. should be made with respect to the Land account as of December 31? (If no entry is required for a transaction/event, select "No Journal entry required in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit

Answer 1

Journal:-

(i) Equipment A/C ----------------------Dr. $33000

To Bank A/C. $33000

[Being equipment purchased]

(ii) Land A/C -------------------------------Dr. $11300

To Bank A/C. $11300

[Being land purchased]

(iii) Depreciation A/C -------------------Dr. $5680

To Equipment A/C. $5680

[Being depreciation charged on

equipment=(33000-4600)÷5=5680]   

(iv) Equipment A/C -----------------------Dr. $5680

To Profit&Loss A/C. $5680

[Being depreciation debited to P/L A/C]

Since land is a non-depreciable asset, hence no depreciation will be charged on it.