Question 4 Ignore VAT Assume a fair interest rate of 13% EMT Ltd (EMT) is a company which operates in the medical field. EMT has a financial year end of 30 June. EMT purchased a machine from Medinc Ltd (Medinc). The machine was purchased on the 1 August 2020 but was available for use on the 1 September 2020. The agreement between EMT and Medinc stated that the machine will be delivered on 1 August 2020, but payment will be made on 31 July 2021. This agreement was created especially for EMT and is beyond normal credit terms. On the 31 July 2021, EMT is obligated to pay R565,000 to Medinc. The machine has a useful life of 10 years and a residual value of R50,000. You are required to: 1. Prepare all of the general journal entries that should be processed in the accounting records of EMT Ltd for the years ended 30 June 2021 and 30 June 2022. Dates are required.
Question 4 Ignore VAT Assume a fair interest rate of 13% EMT Ltd (EMT) is a company which operates in the medical field. EMT has a financial year end of 30 June. EMT purchased a machine from Medinc Ltd (Medinc). The machine was purchased on the 1 August 2020 but was available for use on the 1 September 2020. The agreement between EMT and Medinc stated that the machine will be delivered on 1 August 2020, but payment will be made on 31 July 2021. This agreement was created especially for EMT and is beyond normal credit terms. On the 31 July 2021, EMT is obligated to pay R565,000 to Medinc. The machine has a useful life of 10 years and a residual value of R50,000. You are required to: 1. Prepare all of the general journal entries that should be processed in the accounting records of EMT Ltd for the years ended 30 June 2021 and 30 June 2022. Dates are required.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Question 4
Ignore VAT Assume a fair interest rate of 13%
EMT Ltd (EMT) is a company which operates in the medical field. EMT has a financial year
end of 30 June. EMT purchased a machine from Medinc Ltd (Medinc). The machine was
purchased on the 1 August 2020 but was available for use on the 1 September 2020. The
agreement between EMT and Medinc stated that the machine will be delivered on
1 August 2020, but payment will be made on 31 July 2021. This agreement was created
especially for EMT and is beyond normal credit terms. On the 31 July 2021, EMT is obligated
to pay R565,000 to Medinc. The machine has a useful life of 10 years and a residual value of
R50,000.
You are required to:
1. Prepare all of the general journal entries that should be processed in the accounting
records of EMT Ltd for the years ended 30 June 2021 and 30 June 2022. Dates are
required.
Expert Solution
Step 1
Journal Entry:
Journal entries describe how transactions influence accounts and balances and serve as a simple record of all transactions that a business makes. The information in journal entries, which come in a variety of formats to suit corporate requirements, serves as the foundation for all financial reporting.
For instance, adjusting journal entries are used to accumulate or delay revenue and expenses, alter or rectify earlier entries, or forecast non-cash events like allowances for written-off debt.
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