Allen Coat Ltd purchased a delivery truck on 1 June for $18,000, paying $8,000 cash and signing a 12%, 2-month note payable for the remaining balance. The truck is expected to depreciate $3,000 each year. Allen Coat Ltd prepares monthly financial statements.
(a) Prepare the general journal entry to record the acquisition of the delivery truck on 1 June.
(b) Prepare any adjusting journal entries that should be made on 30 June
(c) Show how the delivery truck will be reflected on Allen Coat Ltd's statement of financial position on 30 June.

Question

Quizplus · Accepted Answer

The Answer of Allen Coat Ltd purchased a delivery truck on 1 June for $18,000, paying $8,000 cash and signing a 12%, 2-month note payable for the remaining balance. The truck is expected to depreciate $3,000 each year. Allen Coat Ltd prepares monthly financial statements.
(a) Prepare the general journal entry to record the acquisition of the delivery truck on 1 June.
(b) Prepare any adjusting journal entries that should be made on 30 June
(c) Show how the delivery truck will be reflected on Allen Coat Ltd's statement of financial position on 30 June.

Allen Coat Ltd Purchased a Delivery Truck on 1 June