$($CPA adapted$)$

$23$ E$10-11($Entries for Equipment Acquisitions$)$ Jane Geddes Engineering Corporation purchased conveyor

$5$

equipment with a list price of $$10,000.$ Presented below are three independent cases related to the equipment. $($Round to the nearest dollar.$)$

$($a$)$ Geddes paid cash for the equipment $8$ days after the purchase. The vendor's credit terms are $2/10,\frac{n}{30}.$ Assume that equipment purchases are initially recorded gross.

$($b$)$ Geddes traded in equipment with a book value of $$2,000($initial cost $$8,000),$ and paid $$9,500$ in cash one month after the purchase. The old equipment could have been sold for $$400$ at the date of trade. $($The exchange has commercial substance.$)$

$($c$)$ Geddes gave the vendor a $$10,800$ zero$-$interest$-$bearing note for the equipment on the date of purchase. The note was due in one year and was paid on time. Assume that the effective$-$interest rate in the market was $9\%.$

$572$ Chapter $10$ Acquisition and Disposition of Property, Plant, and Equipment

Instructions

Prepare the general journal entries required to record the acquisition and payment in each of the independent cases above.