Oki Company pays $294,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. Paid $19,350 cash for a new component that increased the equipment’s productivity.Paid $4,838 cash for minor repairs necessary to keep the equipment working well.Paid $12,300 cash for significant repairs to increase the useful life of the equipment from four to seven years.Note: Enter debits before credits. TransactionGeneral JournalDebitCredit1

Answered: Oki Company pays $294,500 for equipment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Oki Company pays $294,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment.

Paid $19,350 cash for a new component that increased the equipment’s productivity.
Paid $4,838 cash for minor repairs necessary to keep the equipment working well.
Paid $12,300 cash for significant repairs to increase the useful life of the equipment from four to seven years.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1

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Journal entries are the basic method for recording financial transactions in the books of accounts. These entries are used to prepare the ledgers and other financial statements of the company.

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Accounting for Property, Plant and Equipment

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