O'Connor Company ordered a machine on January 1 at a purchase price of $120,000. On the date of delivery January 2, the company paid $30,000 on the machine and signed a long term note payable for the balance On January 3, it paid $1,200 for freight on the machine On January 5, O'Connor paid cash fo installation costs relating to the machine amounting to S7,200. On December 31 (the end of the accounting period), O'Connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $12,800 Required 1. Indicate the ellects (accounts, amounts, and for increase or decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation.

Question

Elliot Andrews

Business

5 March, 22:25

O'Connor Company ordered a machine on January 1 at a purchase price of $120,000. On the date of delivery January 2, the company paid $30,000 on the machine and signed a long term note payable for the balance On January 3, it paid $1,200 for freight on the machine On January 5, O'Connor paid cash fo installation costs relating to the machine amounting to S7,200. On December 31 (the end of the accounting period), O'Connor recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $12,800 Required 1. Indicate the ellects (accounts, amounts, and for increase or decrease) of each transaction (on January 1, 2, 3, and 5) on the accounting equation.

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Bethany Stark · Answer 1

Date Assets = Liabilities + Stockholders' equity

Jan 1

Jan 2 Cash $ - 30,000 Long term note payable 90,000

Machine $ 120,000

Jan 3 Machine $ 1,200

Cash - 1,200

Jan 5 Machine $ 7,200

Cash - 7,200

Dec. 31 Accumulated $11560

depreciation