Question
How do you do the journal entries? A) 01/01/2019 - NewCo bought a delivery truck, financed by Wells Fargo Bank. Paid $2,000 cash down, and
How do you do the journal entries?
A) 01/01/2019 - NewCo bought a delivery truck, financed by Wells Fargo Bank. Paid $2,000 cash down, and owes $18,000. The truck cost $18,000, with sales tax of $1,440, and first year license $560, with monthly payments of $500.00 per month with interest at an annual rate of 5%.
B) 01/01/2019 - NewCo bought Office equipment costing $5,000 from Office Depot for cash. The office equipment is expected to have a useful life of 5 years with a 10% salvage value.
C) 1/31/2019 - Pay the first month's principal and interest due Wells Fargo on the truck loan.
D) 1/31/2019 Record straight line depreciation on the new truck and equipment purchased during the month. The truck has an estimated useful life of 5 years with a 20% estimated salvage value, the office equipment has an estimated useful life of 8 years, with no estimated salvage value.
E) 1/31/2019 - Reclassify the current portion of long-term debt: Wells Fargo Line of Credit $20,000 + Wells Fargo truck loan due in 1 year (12 x $500) $6,000.
F) Accrue interest due on the Wells Fargo line of credit at Jan 31.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
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