Myron Corp has the following information available related to the equipment it uses in its business. Description Information Purchase Date January 1, 2020 Original Capitalized Cost $800,000 Original Useful Life 5 years Original Residual Value $40,000 On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the straight-line depreciation method for all its depreciable assets. Part A: Record the journal entry Myron should make on 1/1/22 for the cost of the extraordinary repair.
Myron Corp has the following information available related to the equipment it uses in its business. Description Information Purchase Date January 1, 2020 Original Capitalized Cost $800,000 Original Useful Life 5 years Original Residual Value $40,000 On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the straight-line depreciation method for all its depreciable assets. Part A: Record the journal entry Myron should make on 1/1/22 for the cost of the extraordinary repair.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Myron Corp has the following information available related to the equipment it uses in its business.
| Description | Information |
| Purchase Date | January 1, 2020 |
| Original Capitalized Cost | $800,000 |
| Original Useful Life | 5 years |
| Original Residual Value | $40,000 |
On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note.
These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the
Part A: Record the
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