The Laura Company Has the Following Errors on Its Books

question 45

Essay

The Laura Company has the following errors on its books as of December 31, 2017. The books for 2017 have not yet been closed.
a. In 2017, fully depreciated equipment with no residual value) that originally cost $8,000 was sold for $700 as scrap. The company credited the $700 proceeds to Equipment.
b. On January 1, 2016, the company recorded the purchase of equipment in exchange for a three-year, noninterest-bearing note payable in the amount of $10,000. Interest rates were then 8%, but no recognition was made of this fact. The present value of $1 at 8% for three periods is 0.7938. Ignore depreciation.)
Required:
Prepare journal entries to correct these errors at December 31, 2017. Ignore income taxes.

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Definitions:

Direct Selling

A retail channel where salespeople sell products directly to consumers, bypassing traditional retail locations.

Pampered Chef

A direct seller of high-quality kitchen tools and accessories, offering products through in-home cooking demonstrations.

Social Shopping

A method of e-commerce where users shop in a social networking-like environment, often including user recommendations, group buying, and interactive discussions.

Online Retailing

The practice of selling goods and services through the Internet, encompassing various e-commerce platforms and websites.