1. On January 1, new equipment is purchased with a list price of $30,000. The company did not take advantage of a 1% cash discount available upon full payment of the invoice within 10 days. Shipping costs paid by the seller were $100. Installation costs are $400, representing 10% of the monthly salary of the manager ( installation took two days). A wall is moved two feet at a cost of $800 to make room for the equipment. Cash discounts not taken are considered interest expense. 2. During January, the first month of operations, the newly purchased equipment became inoperative due to a defect. The seller repaired the equipment at no cost; however, the specially trained operator was idle during the week the machine was inoperative. The operator was paid regular wages ( $650) during the period, although the only work performed was to observe the repair by the factory representative. Hint: Choose your debit answer from accounts Equipment and Manufacturing Overhead. 3. On January 1, the company bought fixtures with a list price of $4,500; the company paid $1,500 cash and issued a one-year, noninterest-bearing note payable for the balance. The current interest rate for this type of note

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Accounting Entries for Equipment Purchase and Repair Heres how to record the accounting entries for ... View the full answer