Prepare Journal Entries to Record the Following Transactions of a Company

Essay

Prepare journal entries to record the following transactions of a company during the current year:
$\begin{array}{|l|l|}\hline \text { Mar. 1 } & \begin{array}{l}\text { Purchased a truck for } \$ 30,000 \text { with a 5-year useful life and a } \$ 5,000 \text { salvage value. } \\\text { Also paid } 6 \% \text { sales tax, } \$ 350 \text { for the annual truck license, } \$ 500 \text { to paint the truck } \\\text { with the company's colors and name, and } \$ 1,500 \text { for spare parts. All payments } \\\text { were in cash. }\end{array} \\\hline \text { May 10 } & \begin{array}{l}\text { Purchased a garage from a neighboring business with a } 7 \%, 4-\text { year, } \$ 75,000 \text { note. } \\\text { The seller's book value for the garage was } \$ 42,750 . \text { The estimated remaining } \\\text { useful life of the garage is } 10 \text { years. }\end{array} \\\hline \text { June 1 } & \text { Paid } \$ 1,000 \text { cash to replace (uninsured) garage windows broken during a storm. } \\\hline \text { Aug 25 } & \begin{array}{l}\text { Purchased used office equipment for } \$ 14,700 \text { cash. Sales tax was } \$ 825, \text { freight } \\\text { costs } \$ 250, \text { and reconditioning costs } \$ 900, \text { all of which were paid in cash. The } \\\text { estimated useful life of the equipment is 3 years and salvage value is } \$ 500 .\end{array} \\\hline \text { Oct. 5 } & \begin{array}{l}\text { Purchased store equipment for } \$ 24,500 \text { cash. Paid } \$ 1,470 \text { in sales tax. } \$ 550 \text { for } \\\text { repairs incurred from an accident during installation, } \$ 3,200 \text { for a special base to } \\\text { house the equipment, and } \$ 2,600 \text { for supplies to be used during periodic preventive } \\\text { maintenance. The estimated useful life of the equipment is } 8 \text { years and salvage } \\\text { value is } \$ 1,200 .\end{array} \\\hline\end{array}$