Answer:
Dr Fixed asset $156,000
Cr Cash $156,000
Being entries to record the cost of the machine
Explanation:
The cost to wire electricity and secure the machine in place are part of the cost to make the machine available for use as such, these will be capitalized with the cost of purchase of the asset.
Capitalized cost of asset
= $144,000 + $10,000 + $2,000
= $156,000
Answer:
yes
Explanation:
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Answer:
Debit Insurance expense $10,000
Credit Prepaid Insurance $10,000
Being entries to recognize insurance expense for the period (August to December).
Explanation:
Given;
Insurance policy was purchased on July 10 to run for 3 years.
Cost of policy = $72,000
Start date is August 1st. As at 31 December, the policy should have been amortized for 5 months (August to December)
Monthly depreciation = $72,000/(3 × 12)
= $2,000
Total amortization between August and December = 5 × $2,000
= $10,000
Journal entries
Debit Insurance expense $10,000
Credit Prepaid Insurance $10,000
Being entries to recognize insurance expense for the period (August to December).
