The following expenditures relating to long-term assets were made by Kosinski Sandwiches during the first two months of 2004. LO9 1. Paid $5,000 of accrued taxes at time his restaurant site was acquired.

2. Paid $200 insurance to cover possible accident loss on new kitchen equipment while the equipment was in transit.

3. Paid $850 sales taxes on new delivery truck.

4. Paid $17,500 for parking lots and driveways on new plant site.

5. Paid $250 to have company name and advertising slogan painted on new delivery truck.

6. Paid $8,000 for installation of new factory machinery.

7. Paid $900 for one-year accident insurance policy on new delivery truck.

8. Paid $75 motor vehicle license fee on the new truck.

Instructions

(a) Explain the application of the cost principle in determining the acquisition cost of plant assets.

(b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited.