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 1 year ago

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