How do I record these entries? January 1: Purchased a fleet of vehicles for $350,000 via a loan from the bank. The trucks have a
How do I record these entries?
January 1:Purchased a fleet of vehicles for $350,000 via a loan from the bank. The trucks have a useful life of six years. The loan is for six years with an interest rate of 4.3%. The company already owned $200,000 of vehicles prior to this purchase with an accumulated depreciation of $80,000.
February 6:It is determined that the intangible recorded for a patent is impaired by $50,000. The patent owned for two years was estimated to be worth $120,000 and has a life of 10 years. Book the journal entry for the impairment.
March 25: Purchased 10-year maturity bonds as an investment for $45,000.
April 5:New construction equipment was purchased for the project at the golf course for $120,000. The forklifts have a useful life of seven years. The company already owned $50,000 of construction equipment prior to this purchase with an accumulated depreciation of $22,000.
May 1: A new long-term lease is entered into for a much larger corporate office which will house the company and its future acquired company. The net present value of the future lease payments is $510,800. The lease is for six years.
June 14:A forklift is disposed of that had a book value of $7,500 and accumulated depreciation of $5,200.
June 30:Book the depreciation for the first half of the year on the vehicles you purchased January 1.
June 30:Book the depreciation for the first half of the year on the construction equipment you purchased April 5.
June 30:Book the interest for the first half of the year on the fleet of vehicles you purchased January 1.
June 30:Book the amortization for the first half of the year on the right-of-use leased asset from May 1.
Step by Step Solution
3.43 Rating (156 Votes )
There are 3 Steps involved in it
Step: 1
Here are the journal entries for each of the transactions January 1 Purchase of Fleet of Vehicles De...See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started