Journalize the entry to record Heartland Telecom's purchase of SamsonSamson Wireless for $400,000 cash plus a $600,000 note payable. 2. What special asset does Heartland Telecom'sHeartland Telecom's acquisition of SamsonSamson Wirelessidentify? How should HeartlandHeartland Telecom account for this asset after acquiring SamsonSamson Wireless? Explain in detail.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Heartland Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Heartland Telecom purchased
| 1. | cash plus a $600,000 note payable. |
|
2.
|
What special asset does
Heartland Telecom'sHeartland Telecom's
acquisition of
SamsonSamson
Wirelessidentify? How should
HeartlandHeartland
Telecom account for this asset after acquiring
SamsonSamson
Wireless? Explain in detail. |
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