Details of this Paper

Garcia Corporation purchased a truck by issuing an...

Description

Solution


Question

Garcia Corporation purchased a truck by issuing an $96,800, 5-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck. (Round answers to 0 decimal places, e.g. $45,892. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Mehta Company traded a used welding machine (cost $12,897, accumulated depreciation $4,299) for office equipment with an estimated fair value of $7,165. Mehta also paid $4,299 cash in the transaction. Prepare the journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit On December 31, 2011, Hurston Inc. borrowed $7,140,000 at 12% payable annually to finance the construction of a new building. In 2012, the company made the following expenditures related to this building: March 1, $856,800; June 1, $1,428,000; July 1, $3,570,000; December 1, $2,856,000. Additional information is provided as follows. 1. Other debt outstanding 10-year, 11% bond, December 31, 2005, interest payable annually $9,520,000 6-year, 10% note, dated December 31, 2009, interest payable annually $3,808,000 2. March 1, 2012, expenditure included land costs of $357,000 3. Interest revenue earned in 2012 $116,620 (a) Determine the amount of interest to be capitalized in 2012 in relation to the construction of the building. The amount of interest $ (b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Alatorre Corporation, which manufactures shoes, hired a recent college graduate to work in its accounting department. On the first day of work, the accountant was assigned to total a batch of invoices with the use of an adding machine. Before long, the accountant, who had never before seen such a machine, managed to break the machine. Alatorre Corporation gave the machine plus $455 to Mills Business Machine Company (dealer) in exchange for a new machine. Assume the following information about the machines. Alatorre Corp. (Old Machine) Mills Co. (New Machine) Machine cost $413 $384 Accumulated depreciation 199 ?0? Fair value 121 576 For each company, prepare the necessary journal entry to record the exchange. (The exchange has commercial substance.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Alatorre Corporation Mills Business Machine Company

 

Paper#9408 | Written in 18-Jul-2015

Price : $25
SiteLock