Response to the following problem:
It's Just Lunch uses computers for data searches. Suppose that on May 1 the company paid cash of $24,000 for Dell computers that are expected to remain useful for two years. At the end of two years, the value of the computers is expected to be zero.
1. Make journal entries to record
(a) purchase of the computers on May 1 and
(b) depreciation on May 31. Include dates and explanations, and use the following accounts:
Computer Equipment; Accumulated Depreciation-Computer Equipment; and Depreciation Expense-Computer Equipment.
2. Post to the accounts listed in requirement 1, and show their balances at May 31.
3. What is the equipment's book value at May 31?