On March 1, fixtures and equipment were purchased for $4,000 with a downpayment

Question

On March 1, fixtures and equipment were purchased for $4,000 with a downpayment of $1,500 and a $2,500 note, payable in one year. Interest of 4% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 9 years with no expected salvage value. [Note: Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third. Also, round all answers to the nearest cent.] Dollar amount: Account: Account: Account: Account: Account: Account: Account: Account: Dollar amount: Dollar amount Dollar amount: Dollar amount: Dollar amount: Dollar amount: Dollar amount:

Explanation / Answer

Cash -1500 Fixtures and equipment 4000 Notes payable 2500 Fixtures and equipment -37.04 =4000/9/12 Retained earnings -37.04 Interest payable 8.33 =2500*4%/12 Retained earnings -8.33

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