Item4

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Item4

Chem-Lite Incorporated maintains its accounts on the basis of a fiscal year ending March 31. At March 31, 20X1, the Equipment account in the general ledger appeared as shown below. The company uses straight-line depreciation, a 10-year life, and 10 percent salvage value for all its equipment. It is the company's policy to take a full year's depreciation on all additions to equipment occurring during the fiscal year, and you may treat this policy as a satisfactory one for the purpose of this problem. The company has recorded depreciation for the fiscal year ended March 31, 20X1.

Equipment
4/1/X0 Balance forward	100,000
12/1/X0	10,500
1/2/X1	1,015
2/1/X1	1,015
3/1/X1	1,015

Upon further investigation, you find the following contract dated December 1, 20X0, covering the acquisition of equipment:

List price	$30,000
5% sales tax	1,500
Total	$31,500
Down payment	10,500
Balance	21,000
8% interest, 24 months	3,360
Contract amount	$24,360

Required:

Prepare the adjusting entries you would propose as auditor of Chem-Lite Incorporated with respect to the equipment and related depreciation accounts at March 31, 20X1. (Assume that all amounts given are material.)

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate computations to the nearest whole dollar value.