Calculate the amount of depreciation oxford would record

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On July 31, 2018 oxford Inc. purchased a machine by signing an 8-month $40,000 zero interest bearing promissory due March 31, 2019. The market rate of interest on similar notes is 6%. The machine will be depreciated using the double-declining method with a useful life of 10 years and salvage value of $ 3,000. Oxford has a 12/31 year-end.

Problem 1) Prepare journal entry to record the purchase of the machine on July 31, 2018?

Problem 2a) In space provided blow, please prepare the necessary adjusting journal entry at December 31, 2018 related to the short-term note?

Problem 2b) In space provided blow, please prepare the necessary adjusting journal entry at December 31, 2018 related to the machine?

Problem 3) Prepare the journal entry when the note matures on March 31, 2019?

Problem 4a) Calculate the amount of depreciation Oxford would record on the machine during 2019 (i.e., the second year the asset is being depreciate)?

Problem 4b) What is the carrying value of the machine at December 31, 2019?

Reference no: EM132685133

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