Record the 2011 entries for the purchase of the machine

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Reference no: EM13134251

Grande Machinery Company purchased, for cash, a $60,000 custom machine on January 1, 2011. The machine has an estimated 5-year life and w ill be straight-line depreciated with no salvage value. The machine was then leased to Sunshine Engineering Company, an 80%-owned subsidiary, under a 5-year operating lease for $15,000 per year, payable each January.

Record the 2011 entries for the purchase of the machine and the lease on the books of Grande machinery and for Sunshine Engineering.

Reference no: EM13134251

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