Prepare the journal entries for the depreciation in 2019

Assignment Help Accounting Basics
Reference no: EM131196500

QUESTION 1

On 1 July 2018 Bombo Ltd issues $ 2 million in six - year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent, interest expense is determined using the effective-interest method.

a) Determine the issue price

b) Provide the journal entries at
+ 1 July 2018
+ 30 June 2019

Hint:
Provide the journal entries at

a) July 1, 2018

Dr ________

Cr ________

b) June 30, 2019

Dr ________

Dr ________

Cr ________

Question 2

Superbank Ltd acquired some machinery at a cost of $2,000,000. As at 30 June 2018 the machinery had accumulated depreciation of $400,000 and an expected remaining useful life of four years.

On 30 June 2018 it was determined that the machinery could be sold at a price of $1,200,000 and that the costs associated with making the sale would be $50,000. Alternatively, the machinery is expected to be useful for another four years and it is expected that the net cash flows to be generated from the machine would be $390,000 over each of the next four years.

It is assessed that at 30 june 2018 the market would require a rate of return of 6 per cent on this type of machinery.

Required:

Determine whether any impairment loss needs to be recognised in relation to the machinery and, if so, provide the appropriate journal entry at 30 June 2018. Also, provide the journal entry to account for depreciation in 2019.
Hint:

a) Prepare the journal entries for the impairment loss as at June 30, 2018.
June 20, 2018
Dr ________
Cr ________
b) Prepare the journal entries for the depreciation in 2019.
Dr ________
Cr ________

Reference no: EM131196500

Questions Cloud

Show graphically the gaussian probability density : Show graphically the Gaussian probability density and the corresponding cummulative probability function.- Also give the equation related to it.
How do you think the treaty affected the average german : Welcome to Week Two. Let's start by looking at the terms of the Treaty of Versailles. Did all the participants want such a harsh treaty? How do you think the treaty affected the average German?
Give the block diagram of pulse reflection techniques : Give the block diagram of the following:-  pulse reflection techniques, typical system and  idealized outgoing and reflected waveforms.
What happened once stalin got power and control : Although Soviet-style communism was an experiment that failed over the long term, the Russian Revolution of 1917 was a pivotal event of the twentieth century. What happened once Stalin got power and control?
Prepare the journal entries for the depreciation in 2019 : Determine whether any impairment loss needs to be recognised in relation to the machinery and, if so, provide the appropriate journal entry - Prepare the journal entries for the depreciation in 2019
How representation of states in congress is determined : How the Constitution addressed the weaknesses in the Articles of Confederation? What the Great Compromise was and how representation of states in Congress is determined?
Impact of european settlers in shaping the view : To understand the impact of European settlers in shaping the view of nature in the New World. To become familiar with the role of artists and writers in portraying nature in the New World.
What evidence in document helps you know why it was written : What evidence in the document helps you know why it was written? Use a quote from the document to support your conclusion. List two things the document tells you about life at the time and place it was written.
What do you think we should do : ACC 203 - Do you have any problems if we do not account for the DTAs and DTLs and just account for the current tax liability and the directors are wondering why we should complicate a very simple way of calculating long service leave - why not "stic..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  The following information was available for pete company

the following information was available for pete company at december 31 2014 beginning inventory 90000 ending inventory

  Calculate the gross profit and cost of goods sold

Calculate the gross profit and cost of goods sold for MB  Calculate the selling price that must be set for this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2013 From a management viewp..

  What is the gross income

What is their gross income, adjusted gross income, and taxable income?

  Multiple-product breakeven

Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the same equipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals $30,000. Parker's accountant has begun to assess the profita..

  One saturday an electronics store gave away free mini-ipods

one saturday an electronics store gave away free mini-ipods to any customer who purchased merchandise totalling over

  What is the effective rate of interest implicit in agreement

Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.

  Explain why an employee individual record is accessed

Explain why an employee individual record is accessed frequently, but changed relatively infrequently.

  Calculating the lp basics

Indicate whether each of the following statements is true or false and explain why. Constant returns to scale and constant input prices are the only requirements for a total cost function to be linear.

  Audit plan for sales places extensive reliance on internal

audit plan for sales places extensive reliance on internal controls and use of substantive analytical procedures. You're testing for internal control for sales has found a significant number of instances where clients' credit ratings have not been ch..

  Assignment-lasa - final project report

Prepare an 8-10-page report in Word. This report should include a project history of your recent Trillo Apparel Company District 4 Production Warehouse Move experience over the last five weeks.

  Report both the debt and the golf course in same category

Should the city, in its government-wide statement of net position, report the debt as a governmental activity and the golf course as a business-type activity? Alternatively, should it report both the debt and the golf course in the same category o..

  Come-clean corporation produces a variety of cleaning

come-clean corporation produces a variety of cleaning compounds and solutions for both industrial and household use.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd