On January 2, 2015, Athol Company bought a machine for use in operations. The machine has an estimated useful life of eight years and an estimated residual value of $1,500. The company provided the following information: a. Invoice price of the machine, $73,150. b. Freight paid by the vendor per sales agreement, $770. c Installation costs, $1,670 cash. d. Cost of cleaning up the supplies, boxes, and other garbage that remained after the installation of the machine, $80 cash. e. Payment of the machine's price was made as follows: January 2: Issued 1,080 common shares of Athol Company at $5 per share. Signed a $42,000 note payable due April 16, 2015, plus 12 percent interest. Balance of the invoice price to be paid in cash. The invoice allows for a 2 percent cash discount if the cash payment is made by January 11. January 15: Paid the balance of the invoice price in cash. April 16: Paid the note payable and interest in cash. f. On June 30, 2017, the company completed the replacement of a major part of the machine that cost $12,350. This expenditure is expected to reduce the machine's operating costs, increase its estimated useful life by two years, and decrease its estimated residual value to $1,000. g. Assume that on October 1, 2022, the company decided to replace the machine with a newer, more efficient model. It then sold the machine to Sako Ltd. on that date for $25,400 cash. Required: 1. Compute the acquisition cost of the machine. Acquisition cost 2. Not available in Connect. 3. Prepare the journal entries to record the purchase of the machine and subsequent cash payments on January 15 and April 16, 2015. (Do not round intermediate calculations and round your final answers to the nearest dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record purchase of machine by issuing shares, signing a note and the balance on account. Note: Enter debits before credits. General Journal Debit Credit Date January 02, 2015 Record entry Clear entry View general journal Journal entry worksheet 1 2 3 Record purchase of machine by issuing shares, signing a note and the balance on account. Note: Enter debits before credits. General Journal Debit Credit Date January 02, 2015 No journal entry required Accounts payable Cash Common shares Record entry View general journal View transaction list Journal entry worksheet 1 2 3 4 > Record purchase of machine by issuing shares, signing a note and the balance on account. Note: Enter debits before credits. General Journal Debit Credit Date January 02, 2015 Common shares Discount lost Interest expense Machinery Note payable Record entry View general journal View transaction list Journal entry worksheet Record payment of machine installation costs. Note: Enter debits before credits. General Journal Debit Credit Date January 02, 2015 Record entry Clear entry View general journal View transaction list Journal entry worksheet Record payment made after discount period. Note: Enter debits before credits. General Journal Debit Credit Date January 15, 2015 Record entry Clear entry View general journal View transaction list Journal entry worksheet Record payment of note and interest Note: Enter debits before credits. General Journal Debit Credit Date April 16, 2015 Record entry Clear entry View general journal
