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: Prepare the journal entry to record the acquisition of this equipment. 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
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: Prepare the journal entry to record the acquisition of this equipment. 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- 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:
- Prepare the
journal entry to record the acquisition of this equipment. - 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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