1. Read the following case and record the transactions and the corresponding adjustment entries: At Caribe Music, a company dedicated to the sale of music equipment, there have been the following transactions and adjustments in the past two years. The transactions are related to the use of the shipping equipment. The depreciation method was the double-declining balance.

First-year	Transaction
6 Feb	A used delivery truck was purchased for cash for $ 35,000.
7 Jul	$ 700 was paid in truck repairs.
31 Dec	Record the depreciation of the truck for the calendar year. The truck had a useful life of 3 years. The truck had a residual of $ 4,500.
Second-year
8 january	A new truck was purchased for cash for $ 52,000.
10 June	Maintenance and repairs were performed on the truck for $ 625.
9 July	$ 300 was paid for repairs to the used truck that was purchased in the first year.
19 September	The truck that was purchased in the first year was sold for $ 20,000. Record the depreciation as of the date the truck is sold.
december 31	Record the depreciation of the truck purchased in the second year. The truck has a useful life of 5 years. The truck has a residual of $ 7,200.

Answer rating: 100% (QA)

Journal entries Date Account Description Ref Debit Credit First Year Feb 6 Truck 1 35000 Cash 35000 ... View the full answer