Orion Flour Mills purchased a new machine and made the following expenditures: P

Question

Orion Flour Mills purchased a new machine and made the following expenditures: Purchase price Sales tax Shipment of machine Insurance on the machine for the first year Installation of machine $67,000 5,600 920 620 1,840 The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Record the above expenditures for the new machine. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the expenditures for the new machine. Note: Enter debits before credits Transaction General Journal Debit Credit

Explanation / Answer

Journal Entry to record the expenditure on new machinery Transaction General Journal Debit Credit 1 Machinery $75,360.00 Prepaid Insurance $620.00 Accounts Payable $72,600.00 Cash $3,380.00

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