Analyse the above and prepare the necessary 31 December 2018 adjusting journal entries to describe the information provided. No narrations required (1) The company bought a small warehouse on 1 January 2018 that costs $465,000. The warehouse is expected to have a residual value of $30,000 at the end of its estimated useful life of 20 years. ACC202 Copyright © 2020 Singapore University of Social Sciences (SUSS) Page 8 of 11 Timed Online Assignment – July Semester 2020 (2) Since the company does not occupy the entire warehouse, it rented out space to two tenants at $600 per month each starting on 1 October 2018. The first tenant paid $1,200 for two months’ rent on 1 October 2018. However, no further payments have been made. On 1 October 2018, the second tenant paid $3,600 for six months’ rental. (3) On 1 January 2018, to finance the purchase of the warehouse, the company took a loan of $150,000 from the bank. The company only needed to start making the first principal repayment on 1 January 2021. The bank charged an interest of 5% per annum. Interest for the loan is payable on 1 January and 1 July. Interest for the six mont
Analyse the above and prepare the necessary 31 December 2018
entries
(1) The company bought a small warehouse on 1 January 2018 that costs
$465,000. The warehouse is expected to have a residual value of $30,000
at the end of its estimated useful life of 20 years.
ACC202 Copyright © 2020 Singapore University of Social Sciences (SUSS) Page 8 of 11
Timed Online Assignment – July Semester 2020
(2) Since the company does not occupy the entire warehouse, it rented out
space to two tenants at $600 per month each starting on 1 October 2018.
The first tenant paid $1,200 for two months’ rent on 1 October 2018.
However, no further payments have been made. On 1 October 2018, the
second tenant paid $3,600 for six months’ rental.
(3) On 1 January 2018, to finance the purchase of the warehouse, the
company took a loan of $150,000 from the bank. The company only
needed to start making the first principal repayment on 1 January 2021.
The bank charged an interest of 5% per annum. Interest for the loan is
payable on 1 January and 1 July. Interest for the six mont
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