Answer:
a. Recorded $200 of depreciation expense.
depreciation expense 200 debit (-net income)
accumulated depreciation 200 credit (-assets)
b. Sold land that had originally cost $9,000 for $13,000 in cash.
cash 13,000 debit +assets
land 9,000 credit -assets
gain on sale 4,000 credit +net income
c. Acquired a new machine under a financing lease. The present value of future lease payments, discounted at 11%, was $11,000.
machinery 11,000 debit +assets
lease liability 11,000 credit +liability
d. Recorded the first annual payment of $2,800 for the leased machine (in part c).
lease liability 2,800 debit -liability
cash 2,800 credit -assets
d. Recorded a $5,900 payment for the cost of developing and registering a trademark.
trademark 5,900 debit +assets
cash 5,900 credit -assets
e. Recognized periodic amortization for the trademark (in part e) using a 34-year useful life.
amortization 173 debit -net income
trademark 173 credit -asset
f. Sold used production equipment for $16,000 in cash. The equipment originally cost $45,000, and the accumulated depreciation account has an unadjusted balance of $23,700. It was determined that a $1,800 year-to-date depreciation entry must be recorded before the sale transaction can be recorded.
book value 45,000 - 23,700 - 1,800 = 19,500
sale price = 16,000 loss of 3,500
cash 16,000 debit +assets
acc depreciation 23,700 debit +asset
depreciation expense 1,800 debit -net income
loss on disposal 3,500 debit -net income
equipment 45,000 credit -assets
Explanation:
We follow the accounting principles:
debit = credit
asset + expense = liabilities + equity + expenses
DEBIT // CREDIT DEBIT // CREDIT
---------------------- ---------------------------------
+++++ // -------- ------- /// +++++++
Left side increase fro mdebit and decrease from credit
right side increase through credit decrease with debit.
