A) Shana purchased a car for $30,000 by putting 20% down in cash, with the balance due as a note payable. Journalize this transaction.
B) Shana's car has a 4 year useful life and an estimated salvage value of $6,000. Shana believes she will drive the car 100,000 miles in four years. (Assume she drives 30,000, 35,000, 25,000 and 10,000 miles in the next four years.) Compute the depreciation for Shana's car for years one and two using the straight line method, units of production, and double declining balance methods.
C) At the end of the third year, Shana decided to trade in her car for a new car valued at $40,000. The car dealer has agreed to give her a trade in value of $9,000 for the old car. Assume the book value of the car is $12,000. She will pay $8,000 in cash and borrow the remaining funds. Journalize this transaction.