During the Year the City of Hamburg Engaged in the Following

Essay

During the year the City of Hamburg engaged in the following transactions. The city uses the consumption method of recording inventories and prepayments. The city has a 6/30 fiscal year end.
REQUIRED: Record the following transactions related to supplies, prepaid items and fixed asset acquisitions.
a. During the year the city purchased $600,000 of expendable supplies.
b. On September 1 the city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities.
c. On December 1 the city purchased four pickup trucks for general government activities. The trucks cost $100,000 in total.
d. On January 1 the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $96,000.
e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease.