View the step-by-step solution to:

Center City uses encumbrance accounting. On June 1, 200X they issue a purchase order for a new copy machine costing $2,000. What accounting entry

Center City uses encumbrance accounting. On June 1, 200X they issue a purchase order for a new copy machine costing $2,000. What accounting entry will they make?

Debit – Encumbrance $2,000; Credit Reserve for Encumbrances - $2,000

Debit – Equipment $2,000; Credit Accounts (Vouchers) Payable - $2,000

Debit – Equipment Expense $2,000; Credit Accounts (Vouchers) Payable - $2,000

No entry is required when the copy machine is order.
Center City uses encumbrance accounting. On June 18, 200X they receive a new copy machine that they ordered on June 1, 200X. The original cost was $2,000. They were billed $2,100 as there was a price increase. What accounting entry will they make on June 18?

Debit – Equipment Expense $2,100; Credit Accounts (Vouchers) Payable - $2,100

No entry is required on June 18 as it was made on June 1 when the copy machine was ordered.

Debit Reserve for Encumbrances - $2,000 Credit – Encumbrance $2,000

Debit – Equipment $2,100; Credit Accounts (Vouchers) Payable - $2,100
Sign up to view the entire interaction

Top Answer

Dear Student Please find... View the full answer

Accounting-8092068.doc

Q1. Center City uses encumbrance accounting. On June 1, 200X they issue a purchase order
for a new copy machine costing $2,000. What accounting entry will they make?
a. Debit – Encumbrance...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online