Prepare all necessary journal entries for 2016 2017 and 2018
Prepare all necessary journal entries for 2016, 2017, and 2018 related to each of the following scenarios:
a. On January 1, 2016, Sustco Ltd. purchased a piece of equipment for $21,000. At the time, management determined that the equipment would have a residual value of $3,000 at the end of its five-year life. Sustco has a December 31 year end and uses the straight-line depreciation method.
b. Assume the same facts as in part “a” except that Sustco uses the double-diminishing-balance method for depreciation of equipment.
c. Assume the same facts as in part “a” except that Sustco purchased the equipment on September 30 rather than on January 1. Also assume that Sustco ended up selling the piece of equipment on June 30, 2018, for $13,000.
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