Prepare the journal entries that recorded the transactions during the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem)
Prepare the journal entries that recorded the transactions during the year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Culver Farms Ltd., which follows ASPE, had the following transactions during the fiscal year ending December 31, 2020.
1.
On May 1, a used tractor was sold at auction. The information concerning this transaction included:
Original cost of the tractor
$52,900
Carrying amount of tractor at date of sale
20.800
Cash proceeds obtained at sale
22.900
2.
After the seeding season, on June 15, 2020, a plough with an original cost of $6,950 and a carrying amount of $650 was
discarded.
3.
On September 1, 2020, a new plough was purchased for $7,700.
4.
On December 30, a section of land was sold to a neighbouring farm called Clear Pastures Ltd. The original cost of the land
was $50,000. To finance the purchase, Clear Pastures gave Culver a three-year mortgage note in the amount of $75,000 that
carries interest at 6%, with interest payable annually each December 30,
On December 31, 2020, depreciation was recorded on the farm equipment in the amount of $17,200.
Prepare the journal entries that recorded the transactions during the year. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record
journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Pebis
Credit
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