In Starsearch Corporation began work on three research and development projects. One of the projects was completed and
commercial production of the developed product began in December. The company's fiscal yearend is December All of the
following expenditures were included in the R&D expense account:
A total of $ of equipment was purchased solely for use in one of the projects. After the project is completed, the equipment
will be abandoned. The remaining $ in equipment will be used on future R&D projects. The useful life of equipment is five
years. Assume that all of the equipment was acquired at the beginning of the year.
Required:
Prepare journal entries, reclassifying amounts in R&D expense, to reflect the appropriate treatment of the expenditures.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field.
Journal entry worksheet
Record entry to capitalize the cost of equipment to be used on future projects
incorrectly charged to R&D expense.
Note: Enter debits before credits.
