Onslow Company purchased a used machine for $288,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $34,560 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Required: 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]
Onslow Company purchased a used machine for $288,000 cash on January 2. On January 3, Onslow paid $10,000 to
wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation.
The machine will be used for six years and have a $34,560 salvage value. Straight-line depreciation is used. On
December 31, at the end of its fifth year in operations, it is disposed of.
Required:
1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred.
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Onslow Company purchased a used machine for $288,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $34,560 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of. Required: 1. Prepare journal entries to record the machine's purchase and the costs to ready it for use. Cash is paid for all costs incurred.
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