Problem 11-7A Czyz and Ng are accountants at Sheridan Printers. Sheridan has not adopted the revaluation model for accounting for its property, plant, and equipment. The accountants are having disagreements over the following transactions during the fiscal year ended December 31, 2017:

1. Sheridan bought equipment on January 1, 2017, for $81,000, including installation costs. The equipment has a useful life of five years. Sheridan depreciates equipment using the double diminishing-balance method. Since the equipment as installed in our system cannot be removed without considerable damage, it will have no resale value. It should not be depreciated but, instead, expensed immediately, Czyz argues.

2. Depreciation for the year was $42,000. Since the companys profit is expected to be low this year, Czyz suggests deferring depreciation to a year when there are higher profits.

3. Sheridan purchased equipment at a fire sale for $34,000. The equipment would normally have cost $50,000. Czyz believes that the following entry should be made:

Equipment 50,000

Cash 34,000

Gain on Fair Value Adjustment of Equipment 16,000

4. Czyz says that Sheridan should carry its furnishings on the balance sheet at their liquidation value, which is $47,000 less than cost.

5. Sheridan rented office space for one year, effective September 1, 2017. Six months of rent at $2,000 per month was paid in advance. Czyz believes that the following entry should be made on September 1:

Rent Expense 12,000

Cash 12,000

6. Land that cost $40,500 was appraised at $63,000. Czyz suggests the following journal entry:

Land 22,500

Gain on Fair Value Adjustment of Land 22,500

Ng disagrees with Czyz in each of the situations.

(b) Prepare the correct journal entry to record each transaction.