O'Connor Company ordered a machine on January $1$ at a purchase price of $$40,000.$ On the date of delivery, January $2,$ the company paid $$10,000$ on the machine and signed a long$-$term note payable for the balance. On January $3,$ it paid $$350$ for freight on the machine. On January $5,$ O'Connor paid cash for installation costs relating to the machine amounting to $$2,400.$ On December $31($the end of the accounting period$),$ O'Connor recorded depreciation on the machine using the straight$-$line method with an estimated useful life of $10$ years and an estimated residual value of $$4,750.$

Required:

Indicate the effects $($accounts$,$ amounts, and $+$ for increase, $-$ for decrease$)$ of each transaction $($on January $1,2,3,$ and $5)$ on the accounting equation. If a transaction affects a temporary account, include the account name under "Temporary Accounts" and the financial effect under $"$NI$."$ Do not enter an amount under "Stockholders' Equity" for these transactions; their impact on stockholders' equity will occur later when the temporary accounts are closed at year$-$end. Do not enter No Effect $($NE$)$ or zero for any cells without an effect for each transaction despite what may be shown in textbook demonstration cases as these cells should be left blank.

Compute the acquisition cost of the machine.

Compute the depreciation expense to be reported for the first year.

What should be the book value of the machine at the end of the second year?

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $3$

Indicate the effects $($accounts$,$ amounts, and $+$ for increase, $-$ for decrease$)$ of each transaction $($on January $1,2,3,$ and $5)$ on the accounting equation. If a transac $"$NI$."$ Do not enter an amount under "Stockholders' Equity" for these transactions; their impact on stockholders' equity will occur later when the temporary accounts what may be shown in textbook demonstration cases as these cells should be left blank.

Note: Enter any decreases to account balances with a minus sign.

Date

Assets

Liabilities

Stockholders'