Homework Help is Here – Start Your Trial Now!
Business
Accounting
Recording Acquisition Costs Following are three separate cases. Case 1. Equipment with a list price of $36,000 is purchased on account; terms are 2/10, n/30. Payment is made within the discount period. Case 2. Equipment with a list price of $24,000 is purchased on account; terms are 2/10, n/30. Payment is made after the discount period. Any purchase discounts lost are recorded as interest expense. Case 3. Equipment listed at $10,800 (less a 2% discount for cash purchases) is purchased for cash. To take advantage of this discount, the company simultaneously borrowed $9,600 from a bank by issuing a 60-day, 15% note, which is paid in full with interest at its maturity date. For Case 1 and Case 2, prepare journal entries for (a) equipment acquisition, and (b) cash payment.

Recording Acquisition Costs Following are three separate cases. Case 1. Equipment with a list price of $36,000 is purchased on account; terms are 2/10, n/30. Payment is made within the discount period. Case 2. Equipment with a list price of $24,000 is purchased on account; terms are 2/10, n/30. Payment is made after the discount period. Any purchase discounts lost are recorded as interest expense. Case 3. Equipment listed at $10,800 (less a 2% discount for cash purchases) is purchased for cash. To take advantage of this discount, the company simultaneously borrowed $9,600 from a bank by issuing a 60-day, 15% note, which is paid in full with interest at its maturity date. For Case 1 and Case 2, prepare journal entries for (a) equipment acquisition, and (b) cash payment.

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

solve please 

 

Recording Acquisition Costs Following are three separate cases. Case 1. Equipment with a list price of $36,000 is purchased on account; terms are 2/10, n/30. Payment is made within the discount period. Case 2. Equipment with a list price of $24,000 is purchased on account; terms are 2/10, n/30. Payment is made after the discount period. Any purchase discounts lost are recorded as interest expense. Case 3. Equipment listed at $10,800 (less a 2% discount for cash purchases) is purchased for cash. To take advantage of this discount, the company simultaneously borrowed $9,600 from a bank by issuing a 60-day, 15% note, which is paid in full with interest at its maturity date. For Case 1 and Case 2, prepare journal entries for (a) equipment acquisition, and (b) cash payment. Case 1 Account Name To record acquisition of equipment. To record payment on account. Case 2 Account Name To record acquisition of equipment. << Dr. Dr. Cr. Cr.
Transcribed Image Text:Recording Acquisition Costs Following are three separate cases. Case 1. Equipment with a list price of $36,000 is purchased on account; terms are 2/10, n/30. Payment is made within the discount period. Case 2. Equipment with a list price of $24,000 is purchased on account; terms are 2/10, n/30. Payment is made after the discount period. Any purchase discounts lost are recorded as interest expense. Case 3. Equipment listed at $10,800 (less a 2% discount for cash purchases) is purchased for cash. To take advantage of this discount, the company simultaneously borrowed $9,600 from a bank by issuing a 60-day, 15% note, which is paid in full with interest at its maturity date. For Case 1 and Case 2, prepare journal entries for (a) equipment acquisition, and (b) cash payment. Case 1 Account Name To record acquisition of equipment. To record payment on account. Case 2 Account Name To record acquisition of equipment. << Dr. Dr. Cr. Cr.
Case 2 Account Name To record acquisition of equipment. To record payment on account. Case 3 Account Name For Case 3, record the entry for (a) the purchase of equipment for cash and for (b) the payment of the note at maturity. Note: Do not record the entry for issuance of the note. To record acquisition of equipment. くくくくく To record payment of note payable. Dr. > > > > > Cr. Dr. Cr.
Transcribed Image Text:Case 2 Account Name To record acquisition of equipment. To record payment on account. Case 3 Account Name For Case 3, record the entry for (a) the purchase of equipment for cash and for (b) the payment of the note at maturity. Note: Do not record the entry for issuance of the note. To record acquisition of equipment. くくくくく To record payment of note payable. Dr. > > > > > Cr. Dr. Cr.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting Policies, Changes in Accounting Estimates and Errors
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
SEE MORE TEXTBOOKS