Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000.

Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.

a. Prepare the journal entry necessary for recording the purchase of the new carpet.

b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method.

Answer:

a. Apr. 30 Carpet 18,000

Cash18,000

b.  Dec. 31 Depreciation Expense—Carpet 800

Accumulated Depreciation—Carpet800

Carpet depreciation

[($18,000 ÷ 15 years) × (8 ÷ 12)].