On July 1st Brockman Manufacturing Company (BMC) purchased some new factory equipment. The equipment had a base price of $100,000 plus 5% GST. BMC paid $3,150 shipping (including 5% GST) on top of the base price to get the equipment to the factory. BMC also paid $4,200 (including 5% GST) for specialized enhancements that are needed to get the equipment ready to use. To pay for the purchase (including shipping and enhancements), BMC used $16,350 of cash and took out a 4 year loan from the bank for the remainder. The loan carries a 5% interest rate and is setup as a fixed principal plus interest loan. The first installment payment on the loan is due August 1st . The equipment has an estimated useful life of 4 years and a residual value of $20,000. The company uses the diminishing balance method of depreciation with a 40% rate.

11.) Complete the journal entry to record the purchase of the equipment. (4 marks)

12.) Complete the payment schedule below for the first 3 payments of the loan. Round to the nearest dollar. (6 Marks)

Payment Date Opening Princial Payment Amount Interest Principal Reduction Ending Principal

August 1

September 1

October 1 5

13.) Calculate the first 4 years of depreciation on the equipment assuming the company has a June 30 fiscal year end. (6 marks)