ir company has acquired several pieces of equipment. Prepare the journ pwing transactions. You bought NEW equipment (equipment A) which had a market va exchanged OLD equipment (equipment B) which cost $50,000, had $30,000, and a market value of $28,000 plus you paid $3,000 in cas LACKS commercial substance.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Question D 

Using this step what is N = , I%= , PV= , PMT=, FV= , and as well as journal entry

Your company has acquired several pieces of equipment. Prepare the journal entry for the
following transactions.
You bought NEW equipment (equipment A) which had a market value of $32,000 and
exchanged OLD equipment (equipment B) which cost $50,000, had a book value of
$30,000, and a market value of $28,000 plus you paid $3,000 in cash. This transaction
А.
LACKS commercial substance.
You bought NEW equipment (equipment C) which had a market value of $11,000 and
exchanged OLD equipment (equipment D) which cost $20,000, had a book value of
$12,000, and a market value of $13,000 plus you RECEIVED $2,000 in cash. This
В.
transaction HAS commercial substance.
You bought equipment (equipment E) and paid for it with 3,000 shares of your $10 par
common stock which has a book value of $19 per share and a market value of $26 per
С.
share.
You bought equipment (equipment F) and signed a 6% note in which you agreed to make
48 monthly payments of $1,521 at the end of each month. Record (1) the purchase and
(2) the payment at the END of the first month.
D.
B.
Transcribed Image Text:Your company has acquired several pieces of equipment. Prepare the journal entry for the following transactions. You bought NEW equipment (equipment A) which had a market value of $32,000 and exchanged OLD equipment (equipment B) which cost $50,000, had a book value of $30,000, and a market value of $28,000 plus you paid $3,000 in cash. This transaction А. LACKS commercial substance. You bought NEW equipment (equipment C) which had a market value of $11,000 and exchanged OLD equipment (equipment D) which cost $20,000, had a book value of $12,000, and a market value of $13,000 plus you RECEIVED $2,000 in cash. This В. transaction HAS commercial substance. You bought equipment (equipment E) and paid for it with 3,000 shares of your $10 par common stock which has a book value of $19 per share and a market value of $26 per С. share. You bought equipment (equipment F) and signed a 6% note in which you agreed to make 48 monthly payments of $1,521 at the end of each month. Record (1) the purchase and (2) the payment at the END of the first month. D. B.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Techniques of Time Value Of Money
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education