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Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
Edition 22ISBN: 978-0077862275Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
Edition 22ISBN: 978-0077862275 Exercise 5
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.
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.
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.
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.
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
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An asset is capitalized and appears in t...
Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta
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