Perth Construction Company The Perth Construction Company purchased a piece of machinery on June 29, 2013 for $53 000

Finance Dec 08, 2020

Perth Construction Company
The Perth Construction Company purchased a piece of machinery on June 29, 2013 for $53 000. Freight costs came to $800. It cost $1 700 to install and test the machinery. At this time it was estimated that the machine would be used for six years and would have a residual value of $8 000 at that time.
Before recording the 2016 amortization expense, the owners realized that this machinery would last only five years, and therefore revised the amortization expense calculation.
On July 2, 2017, the machine broke down and rather than repair it, the company decided to sell it for $12 000.
a) Prepare the journal entry to record the purchase of the machine on June 29, 2013.

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