Chapter 10, Problem 9QS

Revenue and capital expenditures C3
1. Classify the following as either a revenue expenditure (RE) or a capital expenditure (CE).
_a. Paid $40,000 cash to replace a motor on equipment 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 a building for $225,000 cash.
2. Prepare the journal entries to record the four transactions from part 1.