Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 79

Classify the following as either a revenue expenditure or a capital expenditure.
_______a. Paid $40,000 cash to replace a compressor on a refrigeration system that extends its useful life by four years.
_______b. Paid $200 cash per truck for the cost of their annual tune-ups.
_______c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system.
_______d. Completed an addition to an office building for $225,000 cash.
2. Prepare the journal entries to record transactions a and d of part 1.