Question

The following transactions occurred during 2025 . Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fuxed assets disposed of during the year.

Jan 30
A building that cost $163,680 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $6.324 and was permitted to keep all materials salvaged.

Mar. 10
Machinery that was purchased in 2018 for $19,840 is sold for $3,596 cash, fob. purchaser's plant. Freight of $372 is paid on the sale of this machinery.

Mar. 20
Agear breaks on a machine that cost $11.160 in 2017 . The gear is replaced at a cost of $2,480. The replacement does not extend the useful life of the machine but does make the machine more efficient.

May 18
A special base installed for a machine in 2019 when the machine was purchased has fo be replaced at a cost of $6,820 beciuse of defective workmanship on the original base. The cost of the machinery was $17,608 in 2019 . The cost of the base was $4,340, and this amount was charged to the Machinery account in 2019.

June 23
One of the buildingsis repainted at a cost of $8.556. It had not been painted since it was constructed in 2021.

Prepare general joornal entries for the transactions. (Record journal entries in the order presented in the problem. Credit occount titles are outomatically indented when amount is entered. Do not indent monually. If no entry is required, select "No Entry" for the account tites and enter O for the amounts. Ust all debit entries before credit entries)

Answer 1

To prepare journal entries for the given transactions, debit the appropriate expense accounts and credit the corresponding asset or cash accounts.

Step-by-step explanation:

To prepare journal entries for the given transactions, we need to record the debits and credits for each transaction. Here are the journal entries:

1. Jan. 30: Debit the Wrecking Expense account for $6,324 and credit the Accumulated Depreciation - Building account for $157,356 ([$163,680 - $6,324] x 0.95).
2. Mar. 10: Debit the Cash account for $3,596, debit the Accumulated Depreciation - Machinery account for $10,877 ([($19,840 x 0.9) - $3,596] x 0.9), and credit the Machinery account for $15,440 ($19,840 - $3,596).
3. Mar. 20: Debit the Machinery Repair Expense account for $2,480 and credit the Cash account for $2,480.
4. May 18: Debit the Machinery Repair Expense account for $6,820 and credit the Cash account for $6,820.
5. June 23: Debit the Building Repainting Expense account for $8,556 and credit the Cash account for $8,556.