Jane Geddes Engineering Corporation purchased conveyor equipment with a list

Jane Geddes Engineering Corporation purchased conveyor equipment with a list price of $10,000. The vendor’s credit terms were 2/10, n/30. Presented below are two independent cases related to the equipment. Assume that the purchases of equipment are recorded gross. (Round to nearest dollar.)

(a) Geddes paid cash for the equipment 8 days after the purchase.

(b) Geddes traded in equipment with a book value of $2,000 (initial cost $8,000), and paid $9,500 in cash one month after the purchase. The old equipment could have been sold for $400 at the date of trade. Assume the exchange has commercial substance.


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...