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Record the following transactions as journal entries. 1. Earned $5,000 of services on account. 2. Completed...

Record the following transactions as journal entries.

1. Earned $5,000 of services on account.

2. Completed an impairment test, determined there to be an impairment loss on their equipment. Cost of equipment was $785,000, carry value was $328,510 and fair value is $138,000.

Solutions

Expert Solution

1. Earned 5,000 service on account
Account receivable                      Dr. 5000
       To Service Revenue 5000
(Being service revenue raised on account)
2. Impairment loss recognised
Carrying value        328,510
Fair value        138,000
Impairment loss        190,510
Impairment loss                                 Dr        190,510
        To Equipment 190,510
(Being Impairment loss accounted)

ekkarill92 answered 2 years ago
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