On January 1, 2019, Geonosis Corporation purchased a new kyber crystal machine. To finance the purchase,...

On January 1, 2019, Geonosis Corporation purchased a new kyber crystal machine. To finance the purchase, the company borrowed $12,000 and signed a 3-year installment note requiring 4% annual interest. As a result, payments of $4,324.18 must be made at the end of the year for the next three years. The company believes the machine will have a 10-year useful life and a $1,000 residual value. Required: Use the templates provided and labaled in Red/Yellow for each number below.

1. Journalize the acquisition of the kyber crystal machine on January 1, 2019.

2. Complete the amortization table for the installment note.

3. Journalize the payment for December 31, 2019

4. Calculate and journalize the amount of depreciation expense to be recorded at December 31, 2019, if the company utilized the straight-line method of depreciation on an annual basis.

Solutions

Expert Solution

Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Mahinery equipment			12000
	Notes payable				12000
	(for machine purchased)

Amort Chart:
Date	Payment	Int.	Principle	Outstanding
			paid	balance
01.01.19				12000
31.12.19	4324.18	480	3844.18	8155.82
31.12.20	4324.18	326.23	3997.95	4157.87
31.12.21	4324.18	166.31	4157.87	0


Journal entries
S.no.	Accounts title and explanations		Debit $	Credit $
31.12.19	Notes payable			3844.18
	Interest expense			480
	Cash account				4324.18
	(for payment of notes)
31.12.19	Depreciation expense		1100
	Accumulated depreciation	(12000-1000)/10	1100
	(for depreciation charged)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On January 1, 2020, Concord Corporation purchased a new machine for $4130000. The new machine has...

On January 1, 2020, Concord Corporation purchased a new machine for $4130000. The new machine has an estimated useful life of nine years and the salvage value was estimated to be $143000. Depreciation was computed using the sum-of-the-years'-digits method. What amount should be shown in Concord's balance sheet at December 31, 2021, net of accumulated depreciation, for this machine? $2535200 $3987000 $3332600 $2623800

On January 1, 2019, Chelsea Company purchased for $180,000 a new machine that has an estimated...

On January 1, 2019, Chelsea Company purchased for $180,000 a new machine that has an estimated useful life of ten years (or 550,000 stamping operations), after which the expected salvage value is $10,000. Under each of the following depreciation methods, calculate the depreciation expense for 2019. Please show work :) Required: Straight-line depreciation Double-declining balance depreciation Units-of-production depreciation, if 66,000 stamping operations were made in 2019

Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time....

Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time. Southern uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2019, 30% in 2020, and 20% in 2021. Pretax accounting income for 2020 – which is the SECOND year of using this machine – is $150,000, which includes interest revenue of $20,000 from municipal bonds. The enacted tax rate is 30% for...

Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time....

Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time. Southern uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2019, 30% in 2020, and 20% in 2021. Pretax accounting income for 2021 – which is the THIRD year of using this machine – is $140,000, which includes interest revenues of $20,000 from municipal bonds. In December 31, 2020 the enacted tax...

ASSET DEPRECIATION AND DISPOSITION SMS Corporation purchased a new machine for $93,600 on January 1, 20Y1....

ASSET DEPRECIATION AND DISPOSITION SMS Corporation purchased a new machine for $93,600 on January 1, 20Y1. At that time, SMS expected to use the machine for 10 years and then sell it for $9,360. The machine was sold on June 30, 20Y2, incurring a loss on sale of $2,964. SMS used straight-line depreciation. Show the impacts of the above transaction on the financial statements of SMS for 20Y2. List account names or descriptions in the first column and amounts in...

SBS Company purchased a new machine on January 1, at a cost of $420,000. The machine...

SBS Company purchased a new machine on January 1, at a cost of $420,000. The machine has an expected useful life of four years and an expected salvage value of $40,000. The company expects to use the machine for 1,300 hours in the first year, 1,900 hours in the second year, and 900 hours in the third and fourth year, respectively. (a) Calculate Depreciation Expenses for each year using Straight-Line Method Year Depreciation Expenses 1 $ 2 $ 3 $...

On January 1, 2020, The Fio Corporation purchased a machine for $600,000. The corporation estimated a...

On January 1, 2020, The Fio Corporation purchased a machine for $600,000. The corporation estimated a 5-year useful life (or 300,000 units of useful life) and $60,000 residual/salvage value. 45000 Units were produced in 2020. 6 points: Complete the following table using the indicated depreciation method and year for each row of the table. Method Depreciation expense Accumulated depreciation Book value Straight-line for 2020 Double-declining balance 2020 Double-declining balance 2021 Units-of-production 2020 4 points: What would...

AEK Company purchased a computerized machine on January 1, 2019, for $2,800,000 for the purpose of...

AEK Company purchased a computerized machine on January 1, 2019, for $2,800,000 for the purpose of leasing it. The machine was expected to have an seven-year life from January 1, 2019, to have no salvage value, and to be depreciated on a straight- line basis. On January 1,2019, AEK leases the machine to U-Life Company at a total rental of $1,500,000, payable in four annual installments in the following acceleration pattern; 15% in the first two years, 25% in the...

ABC Corporation purchased a machine on January 1, 2017, for $56,000. Before the machine was utilized...

ABC Corporation purchased a machine on January 1, 2017, for $56,000. Before the machine was utilized in a productive capacity, it was needed to build a support in value of $4,000 to accommodate the machine, and to train an operator for using the machine ($2,000). For security reasons, a 5-years insurance policy was purchased for the machine in value of $5,000. Depreciation on the machine was recorded at the end of each year. The depreciation rate is $6,200 per year....

On January 1, 2019, Seek Company purchased a copy machine. The machine costs $960,000, its estimated...

On January 1, 2019, Seek Company purchased a copy machine. The machine costs $960,000, its estimated useful life is 8 years, and its expected salvage value is $60,000. What is the depreciation expense for 2020 using double-declining-balance method? Select one: A. $157,500 B. $ 105,000 C. $180,000 D. $240,000

Subjects