E10-11B (Entries for Equipment Acquisitions) Mays Engineering Corporation purchased conveyor equipment with a list price of $12,000. The vendor’s credit terms were 2/10, n/30. Presented below are three independent cases related to the equipment. Assume that the purchases of equipment are recorded gross. (Round to nearest dollar.)
(a) Mays paid cash for the equipment 8 days after the purchase.
(b) Mays traded in equipment with a book value of $2,400 (initial cost $9,600), and paid $11,400 in cash one month after the purchase. The old equipment could have been sold for $480 at the date of trade (assume similar equipment).
(c) Mays gave the vendor a $12,960 zero-interest-bearing note for the equipment on the date of purchase.
The note was due in one year and was paid on time. Assume that the effective interest rate in the market was 8%.
Prepare the general journal entries required to record the acquisition and payment in each of the independent
cases above. Round to the nearest dollar.
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