Prepare journal entries to record the purchase of the assets

Reference no: EM132721679

Question - Selected transactions of Coromandel Ltd are given below. The company uses straight-line depreciation and calculates depreciation expense to the nearest whole month.

2018 Jan. 4 Purchased from Brampton Ltd a bottle washer (Serial No. 17538X) for $40,000 cash (net of GST). The useful life of the machine is 5 years and its residual value is expected to be $7,000.

April 10 Purchased from Granada Ltd a dryer (Serial No. PY43121) for $36,000 cash (net of GST). The machine has a useful life of 6 years and a residual value of $8,000.

Required -

A] Prepare journal entries to record the purchase of the assets and to record depreciation expense on 30 June 2018 and 2019, the end of the company's reporting periods.

B] Open a machinery account and an accumulated depreciation - machinery account and prepare subsidary property and plant records for the two assets. Post the entries to the general ledger accounts and to the subsidary property and plant records.

Reference no: EM132721679

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