Ch.9 Q.3

OConnor Company ordered a machine on January 1 at a purchase price of $95,000. On the date of delivery, January 2, the company paid $24,000 on the machine and signed a long-term note payable for the balance. On January 3, it paid $1,000 for freight on the machine. On January 5, OConnor paid cash for installation costs relating to the machine amounting to $5,700. On December 31 (the end of the accounting period), OConnor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $10,200.

- Indicate the effects (accounts, amounts, and + for increase, for decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation with exact values

- What should be the book value of the machine at the end of the second year? (Do not round intermediate calculations.)