On March 1, fixtures and equipment were purchased for $5,000 with a downpayment

Question

On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,000 plus a $4,000 note payable in one year. Interest of 6.5% per year is due when the note is repaid. The estimated life of the fixtures and equipment is 12 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.]

Cash

Accounts Recievable

Inventory

Prepaid Rent

Fixtures and Equipment

Accounts Payable

Interest Payable

Wages Payable

Notes Payable

Paid-In Capital

Retained Earnings

Leave Blank

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Account: Dollar Amount:

Explanation / Answer

Journal entry:-

March-1:-

Debit Fixtures & Equipment = 5000

Credit Cash = 1000

Credit 6.5% Note Payable = 4000

Annual depreciation on Fixtures & Equipment = (purchase cost

Journal entry:-

March-1:-

Debit Fixtures & Equipment = 5000

Credit Cash = 1000

Credit 6.5% Note Payable = 4000

Annual depreciation on Fixtures & Equipment = (purchase cost

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