Question

5. On December 5, CWM paid the $230 telephone bill accrued for November. 6. On December 11, CWM purchased two computers from Dell Inc. for $4,900 each. CWM paid $400 down with a check; the remaining balance is due in 30 days (n/30). Each computer has an estimated life of two years and a salvage value of $50 each. What are the correct journal entries for these transactions?

Answer 1

Answer:

utilities payable 230

   cash                            230

to record payment of November bill

Computer 9,800

     Cash                           400

     Account payable    9,400

to record purchase of computers

Explanation:

we will credit cash for the amount paid to cancel the tlephone invoice.

We will write-off the payable recognize in Novemeber when the invoice was received.

We will debit the acquired assets (computer)

credit the amount of cash given

and then credit the remainder to recognize the obligation to pay these computers in the near future.