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. 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: january 1, accounts and explanation: equipment, debit: 50,000, credit: cash, 50,000. explanation: purchase equipment. 1b. record the entry for the annual depreciation. date: december 31, accounts and explanation: depreciation expense—equipment, debit: 12,500, credit: accumulated depreciation—equipment, 12,500. explanation: record depreciation expense. 2. post to the accounts and show their balances at december 31. equipment, accumulated depreciation—equipment, depreciation expense—equipment. balance, balance, balance

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. 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: january 1, accounts and explanation: equipment, debit: 50,000, credit: cash, 50,000. explanation: purchase equipment. 1b. record the entry for the annual depreciation. date: december 31, accounts and explanation: depreciation expense—equipment, debit: 12,500, credit: accumulated depreciation—equipment, 12,500. explanation: record depreciation expense. 2. post to the accounts and show their balances at december 31. equipment, accumulated depreciation—equipment, depreciation expense—equipment. balance, balance, balance

Answer

Explanation:

Step1: Analyze Equipment account

The Equipment account was debited for $50,000 on January 1 when the equipment was purchased. There are no other transactions affecting this account mentioned. So the balance of the Equipment account at December 31 is the initial debit amount of $50,000.

Step2: Analyze Accumulated - Depreciation - Equipment account

The Accumulated - Depreciation - Equipment account was credited for $12,500 on December 31 for the annual depreciation. Since it's the first - year end and no other depreciation - related transactions are mentioned, the balance of the Accumulated - Depreciation - Equipment account at December 31 is $12,500.

Step3: Analyze Depreciation Expense - Equipment account

The Depreciation Expense - Equipment account was debited for $12,500 on December 31 for the annual depreciation. As it's the first - year end and no other depreciation - expense transactions are mentioned, the balance of the Depreciation Expense - Equipment account at December 31 is $12,500.

Answer:

Account Balance
Equipment $50,000
Accumulated Depreciation—Equipment $12,500
Depreciation Expense—Equipment $12,500