Question

Exercise 10-14 Ordinary repairs, extraordinary repairs, and betterments LO C3 Oki Company pays $256,600 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 equipment 1. During the second year of the equipment's life, $23.250 cash is paid for a new component expected to increase the equipment's productivity by 10% a year 2. During the third year, $5,813 cash is paid for normal repairs necessary to keep the equipment in good working order 3. During the fourth year, $16,200 is paid for repairs expected to increase the useful le of the equipment from four to five years. View transaction list Journal entry worksheet 2 3 Record the betterment cost of $23,250 paid in cash.

Answer 1

Solution Jowinal Entries credit a Debit Transaction General Journal $ 23290 $23,250 Equipment al To cash ale (Being component purchased for cash ]. $5813 Repair Expense ak $5813. To cash are (Being repaii Expense inquired and paid in cash]. ? $16,200 Equipment ale $16200 To cash ale Being repair Expense charged to Equipment) =* a