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 $800 The company provided the following information a Invoice price of the machine, $55,400 b Freight paid by the vendor per sales agreement, $830 c Installation costs, $1,730 cash d Cost of cleaning up the supplies, boxes, and other garbage that remained after the installation of the machine, $100 cash e Payment of the machine's price was made as follows January 2 Issued 1,100 common shares of Athol Company at $4 per share Signed a $36,000 note payable due April 16, 2015, plus 10 percent interest Balance of the invoice price to be paid in cash The invoice allows for a 3 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 $12,500 This expenditure is expected to reduce the machines operating costs, increase its estimated useful life by two years, and decrease its estimated residual value to $300 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 $25,000 cash Task 1 Compute the acquisition cost of the machine 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 If no entry is required for a transaction event, select No journal entry required in the first account field ) a Record purchase of machine by issuing shares, signing a note and the balance on account b Record payment of machine installation costs c Record payment made after discount period d Record payment of note and interest 4 Compute the depreciation expense for each of the years 2015, 2016, and 2017, assuming the companys fiscal year ends on December 31 Use the straight line depreciation method (Do not round intermediate calculations ) 5 Prepare the journal entry to record the sale of the machine on October 1, 2022 ( Hint First determine the balance of the accumulated depreciation account on that date ) (Do not round intermediate calculations If no entry is required for a transaction event, select No journal entry required in the first account field )

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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

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 $800. The company provided the following information:
a.	Invoice price of the machine, $55,400.
b.	Freight paid by the vendor per sales agreement, $830.
c.	Installation costs, $1,730 cash.
d.	Cost of cleaning up the supplies, boxes, and other garbage that remained after the installation of the machine, $100 cash.
e.	Payment of the machine's price was made as follows:
	January 2:
	Issued 1,100 common shares of Athol Company at $4 per share.
	Signed a $36,000 note payable due April 16, 2015, plus 10 percent interest.
	Balance of the invoice price to be paid in cash. The invoice allows for a 3 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 $12,500. This expenditure is expected to reduce the machines operating costs, increase its estimated useful life by two years, and decrease its estimated residual value to $300.
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 $25,000 cash.

Task:

1.	Compute the acquisition cost of the machine.

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. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Record purchase of machine by issuing shares, signing a note and the balance on account.

b. Record payment of machine installation costs.

c. Record payment made after discount period.

d. Record payment of note and interest

4.	Compute the depreciation expense for each of the years 2015, 2016, and 2017, assuming the companys fiscal year ends on December 31. Use the straight-line depreciation method. (Do not round intermediate calculations.)
5.	Prepare the journal entry to record the sale of the machine on October 1, 2022. (Hint: First determine the balance of the accumulated depreciation account on that date.) (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)