Rahman Company, a manufacturer of steel products, began operations on January 1, 2020.

Rahman has a December 31 fiscal year-end and adjusts its accounts annually.

Selected transactions related to its Brampton plant are as follows:

1. Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery

costs of $200 per unit.

2. Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year

useful life and a residual (salvage) value of 10% of the original cost.

3. Dec. 31, 2021 Recorded depreciation at year end.

4. Jan. 1, 2022 One (1) stamping machine was sold for $1,250.

5. Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the

welding machine was $8,000 and Rahman received a trade-in allowance for the

stamping machine of $2,000 (remainder paid in cash). A new welding machine could

be bought (without a trade-in) for $7,500. The fair market value of the stamping

machine was $1,000.

Instructions:

Prepare all the necessary journal entries for the above transactions of Rahman Company. Assume that

Rahman Company uses straight-line depreciation.