Question
In: Accounting
Sunland Well Services Ltd. purchased equipment for $904,000 on September 30, 2021. The equipment was purchased...
Sunland Well Services Ltd. purchased equipment for $904,000 on September 30, 2021. The equipment was purchased with a $139,000 cash down payment and through the issue of a $765,000, 5-year, 3.6% mortgage note payable for the balance. The terms provide for the mortgage to be repaid in monthly blended payments of $13,951 starting on October 31.Record the first two instalment payments on October 31 and November 30.
Solutions
Expert Solution
Answer:
| Date | Account Titles and Explanation | Debit | Credit | |
| Oct. 31,2021 | Interest expense | 2295 | =765000*3.6%/12 | |
| Mortgage Note Payable | 11656 | |||
| Cash | 13951 | |||
| Nov. 30,2021 | Interest expense | 2260 | =(765000-11656)*3.6%/12 | |
| Mortgage Note Payable | 11691 | |||
| Cash | 13951 |
ekkarill92 answered 2 years agoRelated Solutions
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2021. Abbott purchased...
Abbott Equipment leased a protein analyzer to Werner Chemical,
Inc., on September 30, 2021. Abbott purchased the machine from
NutraLabs, Inc., at a cost of $6.1 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$365,741, payable each September 30, December 31, March 31, and
June 30, with the first payment at September 30, 2021. Abbott's
implicit interest rate is 8%. The useful life of the equipment is
five years. (FV of $1, PV of...
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc., on September 30, 2021. Abbott purchased...
Abbott Equipment leased a protein analyzer to Werner Chemical,
Inc., on September 30, 2021. Abbott purchased the machine from
NutraLabs, Inc., at a cost of $6.1 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$365,741, payable each September 30, December 31, March 31, and
June 30, with the first payment at September 30, 2021. Abbott's
implicit interest rate is 8%. The useful life of the equipment is
five years. (FV of $1, PV of...
On September 30, 2021, Bricker Enterprises purchased a machine for $218,000. The estimated service life is...
On September 30, 2021, Bricker Enterprises purchased a machine
for $218,000. The estimated service life is 10 years with a $30,000
residual value. Bricker records partial-year depreciation based on
the number of months in service.
Depreciation for 2022, using the double-declining-balance method,
would be:
Typewriter Plus purchased equipment for $40,000 on September 30, 2019. The equipment has a residual value...
Typewriter Plus purchased equipment for $40,000 on September 30,
2019. The equipment has a residual value of $8,000 and estimated
life of 8 years. Calculate the net book value of the equipment on
December 31, 2020.
Multiple Choice
$32,000
$28,000
$35,000
$36,000
Which of the following statements about debits is
false?
Multiple Choice
Debits increase assets.
Debits decrease stockholders’ equity.
Debits increase liabilities.
Debits decrease liabilities.
Elephant Company calculated depreciation per year of $8,000 on a
building it purchased on...
ABC Ltd. sold equipment on June 30 2020 for $110,000. The equipment had originally been purchased...
ABC Ltd. sold equipment on June 30
2020 for $110,000. The equipment had originally been purchased for
$160,000 on July 1, 2015. At the time of purchase, the equipment’s
useful life was estimated to be ten years and to only be worth
$10,000 as scrap value at that time. What was the gain or loss
reported by ABC on the sale of the equipment? (State any
assumptions you make).
On September 1, 2017, Wildhorse Ltd. purchased equipment for $31,900 by signing a two-year note payable...
On September 1, 2017, Wildhorse Ltd. purchased equipment for
$31,900 by signing a two-year note payable with a face value of
$31,900 due on September 1, 2019. The going rate of interest for
this level of risk was 6%. The company has a December 31 year
end.
REQUIRED:
1. Calculate the cost of the equipment assuming the note
is as follows. (Round factor values to 5 decimal
places, e.g. 1.25124 and final answers to 0 decimal places,e e.g.
5,275.)
a....
Abbott Equipment leased a protein analyzer to Werner Chemical, Inc. on September 30, 2018. Abbott purchased...
Abbott Equipment leased a protein analyzer to Werner Chemical,
Inc. on September 30, 2018. Abbott purchased the machine from
NutraLabs, Inc., at a cost of $6.35 million. The five-year lease
agreement calls for Werner to make quarterly lease payments of
$414,389, payable each September 30, December 31, March 31, June
30, with the first payment at September 30, 2018. Abbot's implicit
interest rate is 16%. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1...
A company purchased equipment at the beginning of 2021 for $500,000. The equipment is depreciated on...
A company purchased equipment at the beginning of 2021 for
$500,000. The equipment is depreciated on a straight-line basis
with an estimated useful life of nine years and a $50,000 residual
value. At the beginning of 2024, the company revised the
equipment’s useful life to a total of seven years (four more years)
because of changing customer demand. The company also revised the
expected residual value to $30,000. What depreciation expense would
the company record for the year 2024 on...
On June 30, 2021, Kimberly Farms purchased custom-madeharvesting equipment from a local producer. In payment,...
On June 30, 2021, Kimberly Farms purchased custom-made
harvesting equipment from a local producer. In payment, Kimberly
signed a noninterest-bearing note requiring the payment of $60,000
in two years. The fair value of the equipment is not known, but an
8% interest rate properly reflects the time value of money for this
type of loan agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the...
Sunland Ltd. purchased a new machine on April 4, 2014, at a cost of $187,360. The...
Sunland Ltd. purchased a new machine on April 4, 2014, at a cost
of $187,360. The company estimated that the machine would have a
residual value of $16,000. The machine is expected to be used for
10,200 working hours during its four-year life. Actual machine
usage was 1,400 hours in 2014; 2,000 hours in 2015; 2,400 hours in
2016; 2,300 hours in 2017; and 2,100 hours in 2018. Sunland has a
December 31 year end.
Calculate depreciation for the machine...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In two or three sentences, explain how you have seen the concept of grit work in...
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
ADVERTISEMENT