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On January 1, 2023, Land's End Construction purchased a used truck for $56,500. A new motor had to be installed to get the truck in
On January 1, 2023, Land's End Construction purchased a used truck for $56,500. A new motor had to be installed to get the truck in good working order; the costs were $23,000 for the motor and $7,700 for the labour. The truck was also painted for $6,200. It was ready for use by January 4 . A 12-month insurance policy costing $5,500 was purchased to cover the vehicle. The driver filled it with $370 of gas before taking it on its first trip. It is estimated that the truck has a five-year useful life and a residual value of $9,400. Land's End uses the straight-line method to depreciate all of its vehicles. a. Prepare the entry to record the purchase of truck, insurance, and gas. Journal entry worksheet Note: Enter debits before credits. b. Record the depreciation at year-end, December 31, 2023. Journal entry worksheet Note: Enter debits before credits
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