Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $36,288. The carpet is estimated to have a 16-year useful life and no residual value. A. Prepare the journal entry necessary for recording the purchase of the new carpet. Refer to the Chart of Accounts for exact wording of account titles. B. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method. Refer to the Chart of Accounts for exact wording of account titles.

As carpet is not used daily it is not included in the Office Supplies account. It is not also used to make something nor it is a machinery . It is not included in the equipment account. It is included in the Office Furniture account.

Explanation:

Willow Creek Company

Date                      Particulars                         Debit            Credit

Apr 30                Office Furniture (Carpet )$36,288

                                        Cash                                             $36,288

Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life

Depreciation Expense = $36,288/16=  $ 2268

Depreciation Expense= $ (2268/12)* 8= $ 1512

               The year end adjusting entry would be

31 Dec              Depreciation Expense        $1512

                          Accumulated Depreciation                      $ 1512

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