Author Question: Mac, Inc purchased equipment on December 1, 2011 in exchange for a 4-month, 9, 120,000 note. The ... (Read 130 times)

Cooldude101 · **on:** Jul 5, 2018

Mac, Inc purchased equipment on December 1, 2011 in exchange for a 4-month, 9, 120,000 note. The equipment has an estimated useful life of four years and 0 residual value.

Record (a) the purchase of the equipment December 1, 2011 and the adjusting entries for (b) straight-line depreciation and (c) interest for the month-ended December 31, 2011 in the T-accounts provided.

Equipment

Notes payable

Depreciation expense

Accumulated depreciation

Interest payable

Interest expense

Question 2

Most companies will not take a purchase discount, because 1 or 2 discounts are insignificant.
a. True
b. False

Indicate whether the statement is true or false

Ksh22 · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Equipment
(a) 120,000

Notes payable
120,000 (a)

Depreciation expense
(b) 2,500

Accumulated depreciation
2,500(b)

Interest payable
900 (c)

Interest expense
(c) 900

Answer to Question 2

False