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Help with questions b and c. Please provide calculations. Question 10 5.74/7 View Policies Show Attempt History Current Attempt in Progress - Your answer is
Help with questions b and c. Please provide calculations.
Question 10 5.74/7 View Policies Show Attempt History Current Attempt in Progress - Your answer is partially correct. Cheyenne Engineering Corporation purchased conveyor equipment with a list price of $10,900. Presented below are three independent cases related to the equipment. (a) Cheyenne paid cash for the equipment 8 days after the purchase. The vendor's credit terms are 2/10,n/30. Assume that equipment purchases are initially recorded gross. (b) Cheyenne traded in equipment with a book value of $2,000 (initial cost $8,200), and paid $9,200 in cash one month after the purchase. The old equipment could have been sold for $300 at the date of trade. (The exchange has commercial substance.) (c) Cheyenne gave the vendor a $10,400 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%. Prepare the general journal entries required to record the acquisition and payment in each of the independent cases above. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Equipment 9,500 Loss on Disposal of Equipment Accumulated Depreciation-Equipment Accounts Payable 9,200 Equipment 8,200 (To record the purchase of equipment on account.) Accounts Payable 9,200 Cash 9,200 (To record the payment on account.) Equipment 9464 Discount on Notes Payable 936 Notes Payable 10,400 (To record the purchase of equipment with a note.) Interest Expense 936 Notes Payable 10,400 Discount on Notes Payable 936 Cash 10,400 (To record the payment of the note.)Step by Step Solution
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