Answer and Explanation:
The Journal entries are shown below:-
Jan 1
Equipment Dr, $300,600 ($287,600 + $11,500 + $1,500)
To Cash $300,600
(Being equipment is recorded)
Jan 3
Equipment Dr, $4,800
To Cash $4,800
(Being equipment is recorded)
Dec 31
Depreciation expenses-equipment Dr, $70,850
($300,600 + $4,800 - $20,600 - $1,400) ÷ 4
To Accumulated depreciation-equiment $70,850
(Being depreciation expense is recorded)
Year 2018
Jan 1
Equiment Dr, $5,400
To Cash $5,400
(Being equipment is recorded)
Feb 17
Repair expenses Dr, $820
To Cash $820
(Being repair expense is recorded)
Dec 31
Depreciation expenses-equipment Dr, $43,590
To Accumulated depreciation-equiment $43,590
(Being depreciation expense is recorded)
For Computing the Depreciation year 2018
Particulars Amount
Jan 1 2017 Cost of loader ($287,600 + $11,500 + $1,500) $300,600
Add cost of air conditioning installation on
Jan 3 2017 $4,800
Book value of depreciation for year 2017 $305,400
Less: Depriciation of year 2017
($305,400 - $20,600 - $1,400) ÷ 4 $70,850
After depreciation the book value for year 2017 $234,550
Add: Cost to overhaul the loader's engine $5,400
Before depreciation the book value of 2018 $239,950
Depreciation of year 2018
($239,950 - $22,000) ÷ (4 - 2 + 1) $43,590
