Part A (2 marks)

Silver Brain Ltd purchased a new car for $95 500, which paid $40 000 in cash and $55 500 by loan. The manager further paid annual registration costs of $1 000 and an additional $1 200 to a signwriter to paint the companys name on the car. On 30 June, the first car service was done and the manager further paid $500 cash based on the purchase agreement.

Required:

1. Calculate the cost of the new car. (1 mark)

2. Prepare the journal entry to record the transaction relating to the $500 car service. (1 mark)