Consider each of the transactions below. All of the expenditures were made in cash. ...
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Accounting
Consider each of the transactions below. All of the expenditures were made in cash.
The Edison Company spent $16,000 during the year for experimental purposes in connection with the development of a new product.
In April, the Marshall Company lost a patent infringement suit and paid $9,500 in legal fees to the plaintiff.
In March, the Cleanway Laundromat bought equipment. Cleanway paid $10,000 down and signed a noninterest-bearing note requiring the payment of $20,000 in nine months. The cash price for this equipment was $27,000.
On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $32,000.
The Mayer Company, plaintiff, paid $16,000 in legal fees in November, in connection with a successful infringement suit on its patent.
The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $11,200. The old equipment had an original cost of $9,400 and a book value of $4,200 at the time of the trade. Johnson also paid cash of $8,800 as part of the trade. The exchange has commercial substance.
Required:
Prepare journal entries to record each of the above transactions.
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