On June 30, Hanson Company Purchased a Building for $600,000

question 83

Essay

On June 30, Hanson Company purchased a building for $600,000. The company made a cash payment of $200,000 and signed a twenty-year, 8% mortgage note payable for the remainder. Payments of $40,000 are made every June 30 and December 31. The building has a useful life of twenty years and a residual value of $100,000. Hanson uses the straight-line depreciation method and prepares its adjusting entries on an annual basis. Journalize the June 30 transactions, any annual adjusting entries for December 31, and the mortgage payment on December 31.

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Definitions:

Transportation Services

Industry sector focused on moving people or goods from one place to another via various modes such as trucks, trains, ships, and airplanes.

Global Supply Chains

Refers to the worldwide interconnected networks through which goods, services, and information flow from suppliers to consumers.

General Agreement on Tariffs and Trade (GATT)

An international treaty that was aimed at reducing tariffs and other trade barriers to promote economic cooperation and international trade.

World Trade Organization (WTO)

An international organization that regulates international trade by enforcing agreed-upon trade rules among its member countries.