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13 June, 12:23

Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $36,288. The carpet is estimated to have a 16-year useful life and no residual value. A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles.

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  1. 13 June, 12:31
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    As carpet is not used daily it is not included in the Office Supplies account. It is not also used to make something nor it is a machinery. It is not included in the equipment account. It is included in the Office Furniture account.

    Explanation:

    Willow Creek Company

    Date Particulars Debit Credit

    Apr 30 Office Furniture (Carpet) $36,288

    Cash $36,288

    Depreciation Straight Line Method = Cost - Salvage Value / Useful Life

    Depreciation Expense = $36,288/16 = $ 2268

    Depreciation Expense = $ (2268/12) * 8 = $ 1512

    The year end adjusting entry would be

    31 Dec Depreciation Expense $1512

    Accumulated Depreciation $ 1512
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