Question: On 1 July 2023, your company acquired a machine for $103,000 on credit and decided to depreciate it for 25 years with no residual amount.

On 1 July 2023, your company acquired a machine for $103,000 on credit and decided to depreciate it for 25 years with no residual amount. The credit was taken from a local bank that charges 4.2% per annum with payments every year on 30 June. Assume that the fair values of this asset were:

Date Fair Value

1/7/2023 $105,000

30/11/2023 $98,000

30/6/2024 $80,000.

Using the cost model, prepare the relevant journal entries from the date of acquisition to 30 June 2024.

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