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. Jane 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

The general journal entries for the provided transactions are as follows: Jan 30: Debit Accumulated Depreciation - Building, Credit Building. Mar 10: Debit Accumulated Depreciation - Machinery, Credit Machinery, Debit Cash, Credit Gain on Sale of Machinery. Mar 20: Debit Maintenance and Repairs Expense, Credit Cash. May 18: Debit Maintenance and Repairs Expense, Credit Cash. Jan 23: Debit Maintenance and Repairs Expense, Credit Cash.

Step-by-step explanation:

Jan 30: The cost of the building torn down is a sunk cost and is not recorded in the books. The entry for this transaction is:

Jan 30: Debit Accumulated Depreciation - Building, Credit Building

Mar 10: The machinery sold is a fixed asset that is being disposed of, so the entry is:

Mar 10: Debit Accumulated Depreciation - Machinery, Credit Machinery
Mar 10: Debit Cash, Debit Accumulated Depreciation - Machinery, Credit Machinery, Credit Gain on Sale of Machinery

Mar 20: The replacement of the gear on the machine is considered a repair expense and is recorded as:

Mar 20: Debit Maintenance and Repairs Expense, Credit Cash

May 18: The replacement of the special base for the machine is considered a repair expense and is recorded as:

May 18: Debit Maintenance and Repairs Expense, Credit Cash

Jan 23: The cost of repainting the building is a maintenance expense and is recorded as:

Jan 23: Debit Maintenance and Repairs Expense, Credit Cash

Answer 2

Here's the journal entries for the given transactions:

• January 30: Building Demolition

Recorded disposal of the building that was torn down.

Debit Accumulated Depreciation - Buildings, Loss on Disposal of Building.

Credit Buildings.

• March 10: Machinery Sale

Recorded the sale of machinery.

Debit Cash, Accumulated Depreciation - Machinery.

Credit Machinery.

• March 20: Machinery Gear Replacement

Recorded the replacement of a gear on a machine.

Debit Machinery, Cash, Accumulated Depreciation - Machinery, Machinery Repair Expense.

• May 18: Special Base Replacement

Recorded the replacement of a special base for a machine.

Debit Machinery, Cash, Accumulated Depreciation - Machinery, Machinery Repair Expense.

• June 23: Building Repainting

Recorded the cost of repainting a building.

Debit Buildings, Cash, Accumulated Depreciation - Buildings, Repainting Expense.

Step-by-step explanation:

Let's prepare general journal entries for the given transactions:

January 30:

Debit: Accumulated Depreciation - Buildings

Debit: Loss on Disposal of Building

Credit: Buildings

Explanation: Record the disposal of the building.

March 10:

Debit: Cash

Debit: Accumulated Depreciation - Machinery

Credit: Machinery

Explanation: Record the sale of machinery.

Debit: Accumulated Depreciation - Machinery

Credit: Loss on Sale of Machinery

Explanation: Record the accumulated depreciation on the machinery sold.

March 20:

Debit: Machinery

Credit: Cash

Credit: Accumulated Depreciation - Machinery

Credit: Machinery Repair Expense

Explanation: Record the replacement of the gear on the machine.

May 18:

Debit: Machinery

Credit: Cash

Credit: Accumulated Depreciation - Machinery

Credit: Machinery Repair Expense

Explanation: Record the replacement of the special base.

June 23:

Debit: Buildings

Credit: Cash

Credit: Accumulated Depreciation - Buildings

Credit: Repainting Expense

Explanation: Record the cost of repainting the building.

No Entry:

No entry is required for the payment to the wrecking contractor on January 30 because the wrecking contractor was paid in cash, and the salvage materials were kept by the contractor.

Here are the general journal entries for the transactions. Make sure to double-check the accuracy and appropriateness of these entries for your accounting records.