Journalize the transactions and the adjusting entries.

The following transactions, adjusting entries, and closing entries were completed by Crown Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.

2006  

Jan. 9.

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Purchased a used delivery truck for $38,000, paying cash.

Mar. 15.

Paid garage $180 for changing the oil, replacing the oil filter, and tuning the  

engine on the delivery truck.

Dec. 31.

Recorded depreciation on the truck for the fiscal year. The estimated useful life of  

the truck is eight years, with a residual value of $7,000 for the truck.

2007  

Jan. 3.

Purchased a new truck for $62,500, paying cash.

Feb. 20.

Paid garage $150 to tune the engine and make other minor repairs on the used  

truck.

Apr. 30.

Sold the used truck for $25,000. (Record depreciation to date in 2007 for the truck.)

Dec. 31.

Recorded depreciation on the truck. It has an estimated trade-in value of  

$12,000 and an estimated life of 10 years.

2008  

July 1.

Purchased a new truck for $70,000, paying cash.

Oct. 6.

Sold the truck purchased January 3, 2007, for $43,900. (Record depreciation for  

the year.)

Dec. 31.

Recorded depreciation on the remaining truck. It has an estimated residual value  

of $4,500 and an estimated useful life of 10 years.

Instructions

Journalize the transactions and the adjusting entries.

 

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