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Jeff Anderer Enterprises Purchased Computer Equipment on May 1, 2010

question 7

Essay

Jeff Anderer Enterprises purchased computer equipment on May 1, 2010 for $4,500. The company expects to use the equipment for 3 years. It has no salvage value.
1. What adjusting journal entry should the company make at the end of each month if monthly financials are prepared (annual depreciation is $1,500)?
2. What is the book value of the equipment at May 31, 2010?


Definitions:

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) at regular intervals until the maturity date, when the principal amount is repaid.

Market Yield

The current return on investment for a security, factoring in its price variations and dividend payments.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or currency note.

Real Rate Of Return

The yearly percent yield earned from an investment, after accounting for variations in price caused by inflation or various external influences.

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