On March 1, fixtures and equipment were purchased for $5,500 with a downpayment

Question

On March 1, fixtures and equipment were purchased for $5,500 with a downpayment of $2,000 plus a $3,500 note payable in one year. Interest of 6% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. Depreciation on the fixtures and equipment is computed on a straight-line basis. [Note: Record the March 1 equipment purchase first, then the March 31 depreciation adjusting entry, and finally the March 31 interest adjusting entry. Also, round all answers to the nearest cent.]

Explanation / Answer

Account: Fixture and Fitting Dollar amount : 5500

Account: Cash Dollar amount :    -2000

Account: Note Payble Dollar amount :    3500

Account: Fixture and Fitting Dollar amount :    -50.93

Account: Retained Earning Dollar amount :    -50.93

Account: Interest Payable Dollar amount :    17.50

Account: Retained Earning Dollar amount :    -17.50

Account: Leave Blank Dollar amount :   

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