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Loban Company purchased four cars for $9,000 each and expects that they will be sold in 3 years for $1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first year’s depreciation expense. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 11, Problem 7E
Textbook Problem

Loban Company purchased four cars for $9,000 each and expects that they will be sold in 3 years for $1,500 each. The company uses group depreciation on a straight-line basis.

Required:

  1. 1. Prepare journal entries to record the acquisition and the first year’s depreciation expense.
  2. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?

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Chapter 11 Solutions

Intermediate Accounting: Reporting And Analysis
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