factory equipment for $850,000. In addition, it paid $82,000 in sales tax and $7,000 in installation charges. Shipping costs to ship the equipment to the factory were $2,500 and were paid by Lauren. Lauren paid $300,000 in cash and signed a two-year note for the balance. Required: a. Prepare the journal entry to record the acquisition of this equipment. b. Assuming straight-line depreciation, an estimated residual value of $75.000 and an estimated life of

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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4. On January 2, 2022, Lauren Corporation purchased
factory equipment for $850,000. In addition, it paid
$82,000 in sales tax and $7,000 in installation charges.
Shipping costs to ship the equipment to the factory
were $2,500 and were paid by Lauren. Lauren paid
$300,000 in cash and signed a two-year note for the
balance.
Required:
a. Prepare the journal entry to record the acquisition of
this equipment.
b. Assuming straight-line depreciation, an estimated
residual value of $75,000 and an estimated life of
10 years, prepare the journal entry for the
depreciation expense for 2021.
Transcribed Image Text:4. On January 2, 2022, Lauren Corporation purchased factory equipment for $850,000. In addition, it paid $82,000 in sales tax and $7,000 in installation charges. Shipping costs to ship the equipment to the factory were $2,500 and were paid by Lauren. Lauren paid $300,000 in cash and signed a two-year note for the balance. Required: a. Prepare the journal entry to record the acquisition of this equipment. b. Assuming straight-line depreciation, an estimated residual value of $75,000 and an estimated life of 10 years, prepare the journal entry for the depreciation expense for 2021.
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