Mays Engineering Corporation purchased conveyor equipment with a list price of $12,000. The vendors credit terms were
Question:
(a) Mays paid cash for the equipment 8 days after the purchase.
(b) Mays traded in equipment with a book value of $2,400 (initial cost $9,600), and paid $11,400 in cash one month after the purchase. The old equipment could have been sold for $480 at the date of trade (assume similar equipment).
(c) Mays gave the vendor a $12,960 zero-interest-bearing note for the equipment on the date of purchase. The note was due in one year and was paid on time. Assume that the effective interest rate in the market was 8%.
Instructions
Prepare the general journal entries required to record the acquisition and payment in each of the independent cases above. Round to the nearest dollar.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
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