Journal entries for the following as at 30 September are required A delivery truck was purchased on
Question:
Journal entries for the following as at 30 September are required
A delivery truck was purchased on 1 July 2017 for $45,000. It has a useful life of 5 years and a residual value of $5,000.
Office equipment was purchased on 1 October 2017 for $25,200. It has a useful life of 7 years and a residual value of $Nil. No depreciation expenses have been charged in the current (2020) financial year. Round calculations to the nearest Dollar.
Bank Loan
The business has an interest-only loan with Virtual Bank. The interest rate is 7.5% pa and no principal payments are due until 30 June 2026. Interest is payable monthly and no interest has been accounted for this financial year.
Prepaid Rent / Insurance
On 30 June 2019, rent for the store of $26,500 (excluding GST) was paid for 6 months to 31 December 2019. No adjustment has been made for rent expenses for this financial year.
The annual Insurance premium of $33,500 was paid on 30 June 2019 and was all allocated to the Insurance Expense.
Expert Answer:
