1. Please help Electric Energy, Inc. prepare journal entries based on below info
ID: 2432376 • Letter: 1
Question
1. Please help Electric Energy, Inc. prepare journal entries based on below information. Purchased new equipment on January 1, 2018 for $30,000 cash and also paid $2,000 in cash for delivery and installation. The equipment is expected to last 4 years with no residual value, assuming straight-line depreciation, please prepare the adjusting entry for depreciation on December 31, 2018. Paid $6,000 in cash to replace the motor of the equipment with a more efficient one on January 1, 2019, extending the estimated useful life of the machine by 2 years. a. b. c. d. Please prepare the adjusting entry for depreciation on December 31, 2019. e. Paid $1,000 in cash to repair a loose part of the equipment on January 1, 2020. f. Please prepare the adjusting entry for depreciation on December 31, 2020. g. On December 31, 2020, it is determined that the fair value of the equipment is $15,000. Prepare any relevant journal entries. On March 31, 2021 Electric Energy sold the equipment for $14,000 in cash. h. (Please put the question number (a, b., c., d., e.) in the # column.) Account Title Debit CreditExplanation / Answer
1) Journal Entries: No. Accounts Title Debit $ Credit$ a Equipment 32000 Cash 32000 (being cash expense on purchase 30000 plus del & inst 2000) b Dep exp 8000 (32000/4) Acc Dep - equipment 8000 (being dep exp on equipment booked) c Equipment 6000 Cash 6000 (being cash expense on replacement of motor in equipment) d Dep exp 6000 (32000+6000-8000)/5 = 6000 Acc Dep - equipment 6000 of 6 years, first year's dep already made (being dep exp on equipment booked) e Repair expense 1000 Cash 1000 (being loose part repaired) f Dep exp 6000 Acc Dep - equipment 6000 (being dep exp on equipment booked) g Unrealised loss-Eq valuation 3000 Equipment 3000 (Loss on fair valuation of equipment) h Cash 14000 Acc Dep-Eq 20000 Loss on sale of equipemnt 4000 Equipment 35000 Unrealised loss-Eq valuation 3000 (being sale of equipment and loss booked)
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