On June 30, 2020, the Simpson Corporation purchased a piece of equipment from the Krusty Manufacturing Company. Krusty is allowing Simpson to pay $130,000 on June 30, 2020. Simpson accepted these terms. The crane could have been purchased for a cash price of $110,000.

Required –
a) Assuming that Krusty is a publicly accountable entity, write the journal entries for the sale of the crane at June 30, 2020 and at Krusty’s year-ends of December 31, 2020 and December 31, 2021.
b) Repeat part (a) on the assumption that Krusty is a private company subject to ASPE.

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Simpson Corporation Purchased Asset From Krusty manufactu... View the full answer