On December 20, the company paid cash for equipment, $272,300, subject to a 2% cash discount, and freight on equipment of $11,410. Prepare entries on the books of Concord Company for these transactions. (Round intermediate calculations to 5 decimal places, e. g. 1.25124 and final answer to 0 decimal places e. g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Question

Business

Amya Strong

18 July, 08:21

On December 20, the company paid cash for equipment, $272,300, subject to a 2% cash discount, and freight on equipment of $11,410. Prepare entries on the books of Concord Company for these transactions. (Round intermediate calculations to 5 decimal places, e. g. 1.25124 and final answer to 0 decimal places e. g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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Answers (1)

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Teresa Hartman · Answer 1

Dr equipment $ 278,264.00

Cr cash $278,264.00

Explanation:

The amount of cash paid for equipment=$272,300 * (1-2%) = $266,854.00

The cash paid for freight on equipment is $11,410

The cash paid on freight would also be debited to the equipment's account since the cost of an asset includes the amount spent bringing it to its present location and condition.

Total cost of equipment = $266,854.00+$11,410.00