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Problem - On January 1, 20-1, two flight simulators were purchased by a space camp for $77,000 each with a salvage value of $5,000 each and estimated useful lives of eight years. On January 1, 20-2, the hydraulic system for Simulator A was replaced for $6,000 cash and an updated computer for more advanced students was installed in Simulator B for $9,000 cash. The hydraulic system is expected to extend the life of Simulator A three years beyond the original estimate.
Required -
1. Using the straight-line method, prepare general journal entries for depreciation on December 31, 20-1, for Simulators A and B.
2. Enter the transactions for January 20-2 in a general journal.
3. Assuming no other additions, improvements, or replacements, calculate the depreciation expense for each simulator for 20-2 through 20-8.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
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