The following information applies to the questions displayed

The following information applies to the questions displayed below.] Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a cost of $10,000. On January 3, it is installed on a required operating platform costing $2,000, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of. Required information 5.00 points Required: 1. Prepare journal entries to record the machine\'s purchase and the costs to ready and install it. Cash is paid for all costs incurred. Journal entry worksheet Record the purchase of a used machine for $288,000 cash Note: Enter debits before credits Date General Journal Debit Credit Jan 02

Solution

1 Date General Journal Debit Credit 02-Jan Machinery 288000 Cash 288000 03-Jan Machinery 10000 Cash 10000 03-Jan Machinery 2000 Cash 2000 2 a 31-Dec Depreciation expense—Machinery 44240 Accumulated depreciation—Machinery 44240 (a) To record depreciation [($300,000 – $34,560) / 6] = $44,240 b Depreciation expense—Machinery 44240 Accumulated depreciation—Machinery 44240 3 a Cash 21000 Loss on sale of machinery 57800 Accumulated depreciation—Machinery 44240*5 221200 Machinery 300000 b Cash 84000 Accumulated depreciation—Machinery 221200 Machinery 300000 Gain on sale of machinery 5200 c Cash 31500 Accumulated depreciation—Machinery 221200 Loss from fire 47300 Machinery 300000