suppose that on january 1 sunbeam travel company paid cash of $50,000 for equipment that is expected to…

suppose that on january 1 sunbeam travel company paid cash of $50,000 for equipment that is expected to remain useful for four years. at the end of four years, the equipments value is expected to be zero. read the requirements. 1. make journal entries to record (a) purchase of the equipment on january 1 and (b) annual depreciation on december 31. include dates and explanations, and use the following accounts: equipment; accumulated depreciation—equipment; and depreciation expense—equipment. 1a. record the purchase of the equipment. (record debits first, then credits. select the explanation on the last line of the journal - entry table.) date accounts and explanation debit credit

suppose that on january 1 sunbeam travel company paid cash of $50,000 for equipment that is expected to remain useful for four years. at the end of four years, the equipments value is expected to be zero. read the requirements. 1. make journal entries to record (a) purchase of the equipment on january 1 and (b) annual depreciation on december 31. include dates and explanations, and use the following accounts: equipment; accumulated depreciation—equipment; and depreciation expense—equipment. 1a. record the purchase of the equipment. (record debits first, then credits. select the explanation on the last line of the journal - entry table.) date accounts and explanation debit credit

Answer

Explanation:

Step1: Record equipment purchase

When purchasing equipment, we debit the Equipment account to increase the asset and credit Cash (not given in accounts but implied as cash - paid). Here we assume cash is already accounted for in a general - cash related way and we just focus on the equipment part.

Date Accounts and Explanation Debit Credit
Jan 1 Equipment $50,000
(To record purchase of equipment)

Step2: Calculate annual depreciation

The equipment cost is $50,000 and has a useful life of 4 years with no salvage value. Using the straight - line depreciation method, annual depreciation = $\frac{Cost - Salvage\ Value}{Useful\ Life}=\frac{50000 - 0}{4}=12500$.

Date Accounts and Explanation Debit Credit
Dec 31 Depreciation Expense—Equipment $12,500
Accumulated Depreciation—Equipment $12,500
(To record annual depreciation of equipment)

Answer:

Date Accounts and Explanation Debit Credit
Jan 1 Equipment $50,000
(To record purchase of equipment)
Dec 31 Depreciation Expense—Equipment $12,500
Accumulated Depreciation—Equipment $12,500
(To record annual depreciation of equipment)