Required information

Skip to question

$[$The following information applies to the questions displayed below.$]$

During Year $1,$ Ashkar Company ordered a machine on January $1$ at an invoice price of $$21,000.$ On the date of delivery, January $2,$ the company paid $$6,000$ on the machine, with the balance on credit at $10$ percent interest due in six months. On January $3,$ it paid $$1,000$ for freight on the machine. On January $5,$ Ashkar paid installation costs relating to the machine amounting to $$2,500.$ On July $1,$ the company paid the balance due on the machine plus the interest. On December $31($the end of the accounting period$),$ Ashkar recorded depreciation on the machine using the straight$-$line method with an estimated useful life of $10$ years and an estimated residual value of $$3,000.$

Required:

$1.$ Indicate the effects of each transaction on the accounting equation.

Note: Enter decreases to account categories as negative amounts. If the transaction does not impact the accounting equation choose $"$No effect" in the $2.$ Compute the acquisition cost of the machine.first column under "Assets".