During the year the City of Hosta engaged in the following transactions. The city uses the consumption method of recording inventories and prepayments. The city has a 6/30 fiscal year end. REQUIRED: Record the following transactions related to supplies, prepaid items and fixed asset acquisitions. a. During the year the city purchased $ 600,000 of expendable supplies. b. On September 1 the city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities. c. On December 1 the city purchased four pickup trucks for general government activities. The trucks cost $100,000 in total. d. On January 1 the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $ 96,000. e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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During the year the City of Hosta engaged in the following transactions. The city uses the consumption method of
recording inventories and prepayments. The city has a 6/30 fiscal year end. REQUIRED: Record the following
transactions related to supplies, prepaid items and fixed asset acquisitions. a. During the year the city purchased $
600,000 of expendable supplies. b. On September 1 the city paid $360,000 for a three-year insurance policy to cover
some assets used in general government activities. c. On December 1 the city purchased four pickup trucks for general
government activities. The trucks cost $100,000 in total. d. On January 1 the city leased some office equipment for use
in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $
96,000. e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the
lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease
Transcribed Image Text:During the year the City of Hosta engaged in the following transactions. The city uses the consumption method of recording inventories and prepayments. The city has a 6/30 fiscal year end. REQUIRED: Record the following transactions related to supplies, prepaid items and fixed asset acquisitions. a. During the year the city purchased $ 600,000 of expendable supplies. b. On September 1 the city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities. c. On December 1 the city purchased four pickup trucks for general government activities. The trucks cost $100,000 in total. d. On January 1 the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $ 96,000. e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease
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