B. Show how the assets would be reported on the 31 December 2015 balance sheet.

End of Chapter Problem 14.5 On 2 January 2015, Powerhouse Ltd purchased, by exchanging $258,000 cash and a $155,000, 12%, 18-month finance company loan, assets with the following independently determined appraised values: Building Land Machinery and equipment Appraised value $320,000 80,000 100,000 $500,000 The estimated useful life of the building is 30 years and its residual value is $17,000. The $100,000 machinery and equipment amount consists of three machines independently valued at $31,000 each and some office equipment valued at $7,000. The estimated useful lives and residual values for these assets are: Machine 1 Machine 2 Machine 3 Office equipment Useful life Residual value 6 years $3,500 9 years 3,400 4 years 4,600 5 years 400 Powerhouse Ltd uses the straight-line depreciation method. Ignore GST. Prepare journal entries (in general journal form) to record the following. (Enter all debit entries first, followed by all credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to o decimal places, e.g. 5,275.) 1. The purchase of the assets. Powerhouse Ltd General journal (extract) Debit Credit Date Particulars 2015 Jan. 2 (To record purchase of various assets) 2. The accrual of interest expense on the loan on 31 December 2015. Powerhouse Ltd General journal (extract) Debit Credit Date Particulars 2015 Dec. 31 (To record annual interest. Not a qualifying asset) 3. Depreciation expense for the year 2015. Powerhouse Ltd General journal (extract) Debit Credit Date Particulars 2015 Dec. 31 (To record annual depreciation) 4. The payment of the loan on 2 July 2016. Powerhouse Ltd General journal (extract) Debit Credit Date Particulars 2015 Dec. 31 (To record repayment of loan plus interest)