On January 1, 2001, JN Acquired Three Identical Trucks at a Cost

question 158

Essay

On January 1, 2001, JN acquired three identical trucks at a cost of $24,000 each. They have an estimated useful life of four years and a residual value of 10 percent of cost. On January 2, 2002, one truck was damaged in an accident. It was a complete loss except for salvage of $1,400 cash. The company uses group amortization for the trucks. JN has a December 31 year-end and only accounts for amortization at year-end.
(a) Give the entry to record the effects of the accident January 2, 2002.
(b) Give the adjusting journal entries to record amortization expense at the end of 2001 and 2002.

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Definitions:

Express Warranties

Explicit assurances provided by a seller to a buyer, detailing the quality, features, or specifications of the product being sold.

Brochure

A printed piece of marketing material that provides information about a product, service, or organization.

Sample

A specimen or part of something used to show the quality or nature of the whole.

Model

A representation, often simplified, used to describe or simulate a process, system, or concept to promote understanding or predict outcomes.