On August 1, 2018 Barkley Corporation purchased equipment for $90,000 from RCH Company, paying $18,000...

On August 1, 2018 Barkley Corporation purchased equipment for $90,000 from RCH Company, paying $18,000 in cash and signing a 9% note for the balance. Interest and the note balance are due in full on July 31, 2019.
On September 30, 2018, Barkley Corporation borrowed $275,862 from Fast Eddie’s Financing. Barkley signed a promise to pay contract -- agreeing to pay $300,000 at the end of 12 months on July 31, 2019.

Barkley Corporation has a year end of December 31^st.

Required:

a. For each situation above, prepare journal entries for 2018, including necessary adjusting entries at year end 2018 for both situations.

b. Next, prepare the journal entries necessary in 2019 for both situations above.

Solutions

Expert Solution

ekkarill92 answered 11 months ago

Next > < Previous

Related Solutions

Mike's Company purchased equipment that cost $118,000 on August 1, 2018. The equipment has an estimated...

Mike's Company purchased equipment that cost $118,000 on August 1, 2018. The equipment has an estimated useful life of eight years with an estimated salvage of $10,000. Mike's Company has a December 31 year-end. Calculate the following, showing all of your computations well-labeled and in good form under each of the followingindependent scenarios: 1. The equipment is depreciated using machine hours. The machine is expected to be used for a total of 110,000 hours over it estimated useful life. The...

On September 1, 2018, Able Company purchased a building from Regal Corporation by paying $580,000 cash...

On September 1, 2018, Able Company purchased a building from Regal Corporation by paying $580,000 cash and issuing a one-year note payable for the balance of the purchase price. Interest on the note is stated at an annual rate of 11% and is paid at maturity. In its December 31, 2018, balance sheet, Able correctly presented the note and interest payable as follows: Interest Payable: $ 19,800 Notes Payable, 11% due September 1, 2019 $540,000 1. How much must Able...

Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has...

Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has an estimated life of five years and an estimated residual value of $9,000. Sample's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2017, but production subsequent to 2017 will increase by 10,000 units each year. Required: 1....

The Ballard Company purchased equipment for $90,000 on January 1, 2013 that is expected to have...

The Ballard Company purchased equipment for $90,000 on January 1, 2013 that is expected to have a useful life of 4 years at which time it will have a salvage value of $10,000. If the company uses the straight-line method of depreciation, what would the account balance of Accumulated Depreciation be at the end of 2015?

1.) On March 1, 2020, Jefferson Company purchased factory equipment with an invoice price of $90,000....

1.) On March 1, 2020, Jefferson Company purchased factory equipment with an invoice price of $90,000. Other costs incurred were freight costs, $2,100; installation wiring and foundation, $2,200; material and labor costs in testing equipment, $700; oil lubricants and supplies to be used with equipment during the life of the asset, $500; fire insurance policy covering equipment for three years, $1,400. The equipment is estimated to have a $5,000 salvage value at the end of its 8-year useful service life....

On August 1, 2018 Adrian purchased 1,000 shares of Actovision Corporation common stock for $50,000. On...

On August 1, 2018 Adrian purchased 1,000 shares of Actovision Corporation common stock for $50,000. On November 1, 2018, Adrian sold her 1,000 shares of Actovision Corporation common stock for $40,000. On November 15, 2018, Adrian repurchased 800 shares of Actovision Corporation common stock for $28,000. What is Adrian’s realized and recognized gain or loss on the November 1, 2018 sale of her Actovision Corporation common stock. Please show your work and explain your calculations. What is her basis in...

Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment...

Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment will have a residual value of $10,000. Diamond also estimates it will use the equipment for eight years or about 5,000 total hours. Required: Prepare a depreciation schedule for eight years using the following methods: 1. Straight-line. 2. Double-declining-balance. 3. Activity-based. Actual use per year was as follows: Year Hours Used 1 850 2 750 3 800 4 730 5 700 6 625 7...

On January 2, 2018, Baltimore Company purchased 18,000 shares of the stock of Towson Company at...

On January 2, 2018, Baltimore Company purchased 18,000 shares of the stock of Towson Company at $10 per share. Baltimore obtained significant influence as the purchase represents a 40% ownership stake in Towson Company. On August 1, 2018, Towson Company paid cash dividends of $19,000. Baltimore Company intended this investment to a long-term investment. On December 31, 2018, Towson Company reported $50,000 of net income for FY 2018. Additionally, the current market price for Towson Company's stock increased to $26...

The Darlington Equipment Company purchased a machine 5 years ago at a cost of $90,000. The...

The Darlington Equipment Company purchased a machine 5 years ago at a cost of $90,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $9,000 per year. If the machine is not replaced, it can be sold for $10,000 at the end of its useful life. A new machine can be purchased for $150,000, including installation costs. During its 5-year life, it will reduce cash...

On July 1, 2019, Crane Company purchased new equipment for $90,000. Its estimated useful life was...

On July 1, 2019, Crane Company purchased new equipment for $90,000. Its estimated useful life was 7 years with a $13,000 salvage value. On December 31, 2022, the company estimated that the equipment’s remaining useful life was 10 years, with a revised salvage value of $5,000. Prepare the journal entry to record depreciation on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for...

Subjects