Equipment1 was purchased at the beginning of the year 2016 for $50,000 cash. No salvage/residual value....

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Equipment1 was purchased at the beginning of the year 2016 for$50,000 cash. No salvage/residual value. Straight-line depreciationis used over a 10-year life.
Equipment2 was also purchased at the beginning of the year for550,000 (no salvage) 10 year life. We decided to use SL method. Theequipment2 required a $5,000 repair by year-end.
Equipment3 was purchased on 6/1 for 100,000 (20,000 salvagevalue)., 10 year life. We decided to use SYD as a depreciationmethod. At 12/31/2016 it required a capital improvements of $40,000which we signed a note to pay in 9 months.
Prepare Journal entries for all transactions

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4.2 Ratings (732 Votes)

Event	Account Titles and Explanation	Debit	Credit

1	Equipment	$50,000
	Cash		$50,000
	(To record purchase of equipment)

2	Equipment	$550,000
	Cash		$550,000
	(To record purchase of equipment)

3	Equipment	$100,000
	Cash		$100,000
	(To record purchase of equipment)

4	Repair and Maintenance Expense	$5,000
	Cash		$5,000
	(To record repair and maintenance exp.)

5	Equipment	$40,000
	Note Payable		$40,000
	(To record capital improvement on assets)

6	Depreciation Expenses	$68,485
	Accumulated Depreciation		$68,485
	(To record depreciation expenses)


Working
	Equipment - 1
	Cost	$50,000
	Assets Life	10 Years
	Depreciation per year	$5,000

	Equipment - 2
	Cost	$550,000
	Assets Life	10 Years
	Depreciation per year	$55,000

	Equipment - 3
	Cost	$100,000
	Salvage Value	$20,000
	Depreciable cost	$80,000

	Assets Life	10 Years
	Depreciation per year	$8,485
	($80,000 x 10/55 x 7/12)

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Equipment1 was purchased at the beginning of the year 2016 for$50,000 cash. No salvage/residual value. Straight-line depreciationis used over a 10-year life.Equipment2 was also purchased at the beginning of the year for550,000 (no salvage) 10 year life. We decided to use SL method. Theequipment2 required a $5,000 repair by year-end.Equipment3 was purchased on 6/1 for 100,000 (20,000 salvagevalue)., 10 year life. We decided to use SYD as a depreciationmethod. At 12/31/2016 it required a capital improvements of $40,000which we signed a note to pay in 9 months.Prepare Journal entries for all transactions