PA9-3 (Algo) Analyzing and Recording Long-Lived Asset Transactions with Partial-Year Depreciation [LO 9-2, LO 9-3, LO 9-6]

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Precision Construction entered into the following transactions during a recent year.

January 2	Purchased a bulldozer for $268,000 by paying $29,000 cash and signing a $239,000 note due in five years.
January 3	Replaced the steel tracks on the bulldozer at a cost of $29,000, purchased on account. The new steel tracks increase the bulldozer's operating efficiency.
January 30	Wrote a check for the amount owed on account for the work completed on January 3.
February 1	Repaired the leather seat on the bulldozer and wrote a check for the full $1,700 cost.
March 1	Paid $9,000 cash for the rights to use computer software for a two-year period.

PA9-3 (Algo) Part 1-b to 3

1-b. Prepare the journal entries for each of the above transactions.

2. For the tangible and intangible assets acquired in the preceding transactions, determine the amount of depreciation and amortization, if any, that Precision Construction should report for the quarter ended March 31. The equipment is depreciated using the double-declining-balance method with a useful life of five years and $49,000 residual value. The licensing right is amortized using the straight-line method with a useful life of two years and no residual value.

3. Prepare a journal entry to record he depreciation and amortization, if any, calculated in requirement 2.

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

Req 1B

Req 2

Req 3

Prepare the journal entries for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet

Purchased a bulldozer for $268,000 by paying $29,000 cash and signing a $239,000 note due in five years. Record the transaction.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 02

Journal entry worksheet

Replaced the steel tracks on the bulldozer at a cost of $29,000, purchased on account. The new steel tracks increase the bulldozer's operating efficiency. Record the transaction.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 03

Journal entry worksheet

Wrote a check for the amount owed on account for the work completed on January 3. Record the transaction.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 30

Journal entry worksheet

Repaired the leather seat on the bulldozer and wrote a check for the full $1,700 cost. Record the transaction.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
February 01

Journal entry worksheet

Paid $9,000 cash for the rights to use computer software for a two-year period. Record the transaction.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
March 01