Consider each of the transactions below All of the expenditures were made in cash The Edison Company spent $15,000 during the year for experimental purposes in connection with the development of a new product In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,000 In March, the Cleanway Laundromat bought equipment Cleanway paid $9,000 down and signed a noninterest bearing note requiring the payment of $19,500 in nine months The cash price for this equipment was $26,000 On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $31,000 The Mayer Company, plaintiff, paid $15,000 in legal fees in November, in connection with a successful infringement suit on its patent The Johnson Company traded its old equipment for new equipment The new equipment has a fair value of $10,900 The old equipment had an original cost of $8,900 and a book value of $3,900 at the time of the trade Johnson also paid cash of $8,600 as part of the trade The exchange has commercial substance Required Prepare journal entries to record each of the above transactions 1 The Edison Company spent $15,000 during the year for experimental purposes in connection with the development of a new product 2 In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,000 3 In March, the Cleanway Laundromat bought equipment Cleanway paid $9,000 down and signed a noninterest bearing note requiring the payment of $19,500 in nine months The cash price for this equipment was $26,000 4 On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $31,000 5 The Mayer Company, plaintiff, paid $15,000 in legal fees in November, in connection with a successful infringement suit on its patent The Johnson Company traded its old equipment for new equipment The new equipment has a fair value of $10,900 The old equipment had an original cost of $8,900 and a book value of $3,900 at the time of the trade Johnson also paid cash of $8,600 as part of the trade The exchange has commercial substance

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Posted on Jul 10, 2024

Consider each of the transactions below. All of the expenditures were made in cash.

The Edison Company spent $15,000 during the year for experimental purposes in connection with the development of a new product.
In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,000.
In March, the Cleanway Laundromat bought equipment. Cleanway paid $9,000 down and signed a noninterest-bearing note requiring the payment of $19,500 in nine months. The cash price for this equipment was $26,000.
On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $31,000.
The Mayer Company, plaintiff, paid $15,000 in legal fees in November, in connection with a successful infringement suit on its patent.
The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $10,900. The old equipment had an original cost of $8,900 and a book value of $3,900 at the time of the trade. Johnson also paid cash of $8,600 as part of the trade. The exchange has commercial substance.

Required:

Prepare journal entries to record each of the above transactions.

1

The Edison Company spent $15,000 during the year for experimental purposes in connection with the development of a new product.
2

In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $9,000.
3

In March, the Cleanway Laundromat bought equipment. Cleanway paid $9,000 down and signed a noninterest-bearing note requiring the payment of $19,500 in nine months. The cash price for this equipment was $26,000.
4

On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $31,000.
5

The Mayer Company, plaintiff, paid $15,000 in legal fees in November, in connection with a successful infringement suit on its patent.
The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $10,900. The old equipment had an original cost of $8,900 and a book value of $3,900 at the time of the trade. Johnson also paid cash of $8,600 as part of the trade. The exchange has commercial substance.