Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. e10-13 (entries for equipment acquisitions) geddes

E10-13 (Entries for Equipment Acquisitions) Geddes Engineering Corporation purchased conveyor equipment with a list price...

60.1K

Verified Solution

Question

Accounting

E10-13 (Entries for Equipment Acquisitions) Geddes Engineering Corporation purchased conveyor equipment with a list price of $50,000. Three independent cases that are related to the equipment follow. Assume that the equipment purchases are recorded gross.

1. Geddes paid cash for the equipment 25 days after the purchase, along with 5% GST (recoverable) and provincial sales tax of $3,500, both based on the purchase price. The vendors credit terms were 1/10, n/30.

2. Geddes traded in equipment with a book value of $2,000 (initial cost $40,000), and paid $40,500 in cash one month after the purchase. The old equipment could have been sold for $8,000 at the date of trade, but was accepted for a trade-in allowance of $9,500 on the new equipment.

3. Geddes gave the vendor a $10,000 cash down payment and a 9% note payable with blended principal and interest payments of $20,000 each, due at the end of each of the next two years.

Instructions

(a) Prepare the general journal entries that are required to record the acquisition and the subsequent payment, including any notes payable, in each of the three independent cases above. Round to the nearest dollar. For item 3, use a table, financial calculator, or Excel.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students