Chec 6 Oki Company pays $264,000 for equipment expected to last four years and h
ID: 2558991 • Letter: C
Question
Chec 6 Oki Company pays $264,000 for equipment expected to last four years and have a $29,000 salvage value. Prepare journal entries to record the following costs related to the equipment. points 1. During the second year of the equipment's life, $22,000 cash is paid for a new component expected to increase the equipment's productivity by 10% a year 2. During the third year, $6,250 cash is paid for normal repairs necessary to keep the equipment in good working order ebook 3. During the fourth year, $14,870 is paid for repairs expected to increase the useful life of the equipment from four to five years.Explanation / Answer
Journal entry :
D
Date accounts & explanation debit credit Equipment 22000 Cash 22000 (To record new component) Repairs and maintenance 6250 Cash 6250 (To record repairs and maintenance) Equipment 14870 Cash 14870 (To record repairs)