Question

Oki Company pays $253,100 for equipment expected to last four years and have a $30,000 salvage value. Prepare Journal entries to record the following costs related to the equlpment 1, During the second year of the equipment's life, $27400 cash Is pald for a new component expected to Increase the equipment's productivity by 10% a year. 2 Durtng the third year, $6.850 cash is pald for normal repairs necessary to keep the equipment In good working order 3. During the fourth year, $20,350 is pald for repairs expected to Increase the useful life of the equipment from four to five years View transacion let Journal entry worksheet 2 3 ces Record the betterment cost of $27.400 pald in cash Note: Enter debits before credts Transaction General Journal Debit Credit Maw general journal Racord entry Clear antry

please help

Answer 1

Solution:

Journal Entries - OKL Company
Event	Particulars	Debit	Credit
1	Equipment Dr	$27,400.00
	To Cash		$27,400.00
	(Cash paid for new component)
2	Repairs and maintenance expense Dr	$6,850.00
	To Cash		$6,850.00
	(Cash paid for repairs)
3	Equipment Dr	$20,350.00
	To Cash		$20,350.00
	(Cash paid for repairs resulting in increase in useful life)